Egypt is working on a new production-sharing model with foreign energy companies to encourage oil and gas exploration in the Red Sea.
Speaking to Daily News Egypt a source in the sector said that the seismic studies carried out in the Red Sea had showed the possibility of a presence of natural gas in large quantities
The source added that the agreement included increasing the partner’s share and reducing the expense recovery period, in a bid to encourage foreign companies to further invest in Egypt’s oil and gas sector.
During a meeting held in Cairo, On Thursday, Egypt’s Petroleum Minister Tarek El Molla said the new agreements were a simpler way of “having the calculations with out partners.”
He further stated that it will be “one figure that includes cost recovery and the profit share of the partner, so we do not go towards what we call cost recovery audits, which sometimes takes effort and [creates] arguments between different departments.”
The new model of petroleum agreements is set to launch at the end of this year.