The Egyptian Natural Gas Holding Company (EGAS), Ganoub El Wadi Petroleum Holding Company (Ganope) and Toyota have signed a $600 million agreement to purchase an offshore drilling rig capable of operating in deep water, Egypt Oil & Gas reports.

The deal was signed between EGAS head Osama El Bakly, head of Ganope Mohamed El Sheimy and the general manager of oil & gas of Toyota Tsusho at the Mediterranean Offshore Conference and Exhibition (MOC 2018).

The agreement stipulates that the project will be implemented in three stages starting with the preliminary study stage followed by the project development stage. The preliminary and detailed studies of the economic feasibility of the project will be prepared during the first two stages. The implementation will then begin as a third phase.

This agreement comes after a prolonged period of cooperation between Egyptian and Japanese companies in the oil and gas sector. The two sides are currently collaborating on the management and operation of the Cairo-1 and Cairo-2 drilling rigs.

The minister explained that the agreement comes within the framework of the implementation of current and future exploration and production (E&P) plans in the Mediterranean Sea, the Gulf of Suez, and the Red Sea region. The plans require the availability of offshore rigs equipped with modern technology to work in deep water to reduce the costs of development and maximize economic return.

Ministry of Petroleum and Mineral Resources Tarek El Molla pointed out that the project will enable the Egyptian oil and gas sector to own a deep sea drilling rig in floating or semi-floating water.

The project is an important addition to Egypt’s oil and gas sector in the light of the growing research and exploration activities and the development of existing fields, which are expected to increase during the coming period.