Egyptian oil ministry and company officials are working on new model to help the country become self-sufficient in energy. It seeks to transform itself into a gas re-exporting hub by a contract overhaul to liberalize energy industry.
The new contracts would enable investors to use their full share of production as they see fit, without the need to sell it to the government at a preset price.
However they will need to pay all exploration and production costs.
The changes will encourage future oil and natural gas production contracts in undeveloped frontier areas to spur exploration.
Egypt’s oil and gas industry, is the country’s biggest single source of foreign direct investment.
This comes as a deal under discussion between oil giant BP and SDX Energy for the acquisition of a “significant package of assets” in Egypt has been terminated by “mutual agreement”.
This comes as oil prices face volatility, rising to $81.5/bbl yesterday, before falling 3% to $79.9/bbl today following U.S. stockpiles rising more than forecasted.
Companies invested in exploration and oil production in Egypt include giants like BP and Shell, but also small to mid cap companies such as SDX Energy and Rockhopper Exploration.
Trading of SDX Energy shares were suspended following the announcement on 20 September 2018 but resumed trading on AIM at 7.30am on 18 October 2018, it currently has a portfolio of oil and gas assets in Egypt and Morocco.
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