Egypt’s petroleum ministry said on Friday that it signed six oil and gas petroleum exploration agreements in the Western Desert and Gulf of Suez.
Petroleum Minister, Sherif Ismail, signed the agreements with Netherland’s Shell; Italy’s Eni; United Kingdom’s British Petroleum; Canada’s TransGlobe; and Egypt’s Tharwa and Egyptian General Petroleum Corporation, the ministry added in a statement.
The signed deals are worth 271.5 million dollars in investments, in addition to 124 million dollars worth of grants that were allocated to drilling 41 wells.
Gas exploration companies demonstrate reluctance to develop untapped gas in Egyptian waters for reasons including payment by Egypt’s government which hardly covers the costs of investment.
Egypt has paid a new installment worth of $2.1 billion of the sum of money it owes foreign energy firms, bringing its total accumulated debt down to $3.1 billion, Ismail said in December 2014.
Almost one-fifth of Egypt’s state spending goes to energy products’ subsidies. The state has launched a plan to rid it completely of energy subsidies within three to five years.
According to the minister, the sum of Egypt’s oil subsidies could decrease by up to 30 percent during the second half of the fiscal year 2014/2015 should the worldwide drop in oil prices persist.
Oil prices dramatically dropped worldwide during the past six months, almost by 46 percent, with no sign from oil-producing countries of an intention to slow down oil production and control the drop in prices.