The Energy and Environment Committee of Egypt’s House of Representatives, chaired by Tarek El Molla, has approved a government-drafted law authorizing the Minister of Petroleum and Mineral Resources to conclude an exploration and production (E&P) agreement between the Egyptian Natural Gas Holding Company (EGAS) and Cheiron for the East Alexandria Offshore block in the Mediterranean Sea, El Mal Newspaper reported.
Under the proposed production sharing agreement (PSA), EGAS will receive a non-refundable signature bonus of $1 million. The agreement also requires the contractor to commit a minimum investment of $42.2 million, including the drilling of three exploration wells and the reprocessing of seismic data to support the discovery of new natural gas and crude oil reserves.
The agreement sets a cost recovery ceiling of 40%, while EGAS’ share of profit oil and gas will range between 64% and 70%, depending on production levels and Brent crude prices. The fiscal terms are designed to strike a balance between attracting foreign investment and maximizing economic returns for the state.
According to the explanatory memorandum accompanying the draft law, the East Alexandria Offshore block was offered as part of an international bid round launched by EGAS. Cheiron submitted the winning bid, which was approved by EGAS’ technical committees after being deemed to offer strong economic value and the highest return to the state.
The explanatory memorandum noted that the agreement has completed all required legal and regulatory procedures, including approvals from the Armed Forces Operations Authority at the Ministry of Defence and the Board of Directors of EGAS. The draft law will now proceed through the remaining legislative procedures before the agreement can enter into force.
In July 2026, the Egyptian Cabinet approved four draft petroleum agreements with international companies, involving minimum investments of $52.97 million and the drilling of at least six exploration wells, as part of the government’s strategy to expand exploration activities and attract new investments to the upstream sector.
