APA corporation announced that it has reached an agreement in principle with the Egyptian Ministry of Petroleum and Mineral Resources, and the Egyptian General Petroleum Corporation (EGPC) to modernize production sharing contracts in Western Desert, a press release cited.

According to the agreement, the two sides will sign production sharing contract (PSC) which merges most of the concessions operated by APA in the Western Desert into one concession representing 90% of the company’s gross volume production in Egypt on a barrel of oil equivalent (boe) basis.

The statement also indicated that the new PSC will simplify the contractual relationship with EGPC and include provisions to create a single cost recovery pool, adjust cost oil and gas and profit oil and gas participation, facilitate recovery of prior investment, update day-to-day operational governance, and refresh the term length of both exploration and development leases.

On this occasion, Minister of Petroleum and Mineral Resources, Tarek El Molla, said “The agreement in principle with Apache Egypt is an important step as we modernize Egypt’s petroleum sector and position our country as a regional energy hub. It is a win-win for both parties and will help to drive increases in investment and production to the benefit of Egyptians.”

For his part, John J. Christmann, APA Corporation CEO and president said: “The new agreement in principle confirms Egypt’s commitment to economic development and public-private partnerships and will facilitate higher investment levels by Apache Egypt, resulting in more drilling, more production and more sustainability projects, while also enhancing talent development opportunities and delivering cost efficiencies through the introduction of new technology.”

Now, the new PSC is waiting for approval from the Egyptian Government and ratification from the house of representatives.