Petrosalam handed over its exploration concession Northwest October in the Gulf of Suez to EGPC, reported Al Borsa Newspaper Petrosalam began exploration work in January but had to discontinue its operations due to the declining global Brent price of oil which affected the feasibility of the project.
An EGPC official explained that the partner in the concession area has already spent a portion of its share of the project investments, adding that EGPC was studying putting the concession area up for bidding again.
Alternatively EGPC could also hire a consulting firm to devise a development plan then hire an oil company to work as a contractor.
The official said the project was aimed at completing the drilling of wells required to produce about 6,000 b/d of oil, and transfer production to the North Amer station by the General Petroleum Company, with investments estimated at $ 190 million.
He said the decline of the Brent price to $ 51.17 a barrel had a negative impact on many projects, with companies refusing to expand their investments and working only to compensate for natural declines from their concession area.
The official explained that average crude oil production had become stable over the past two years, currently at 695,000 b/d, without any increases because foreign partners refused to conduct more exploratory and development work. This was because of the adverse effects of the global Brent price but also because they had not received their full financial dues from the Egyptian side.
He added that EGPC buys foreign partners’ shares in Egyptian fields in accordance with global Brent price.