Arab Finance: The Egyptian Natural Gas Holding Company (EGAS) has inked a memorandum of understanding (MoU) with ExxonMobil Egypt Upstream Limited to apply a new production-sharing system in the petroleum sector, tied to the latter's ongoing exploration activities in two Mediterranean blocks, the Egyptian Ministry of Petroleum and Mineral Resources stated.

The agreement outlines the framework for a revised petroleum agreement model aimed at enhancing Egypt’s competitiveness in attracting investment to high-risk exploration areas.

The new system is conditional upon ExxonMobil achieving positive results in the Cairo and Masry Offshore blocks, which it won in November 2023.

The initiative comes as part of the Ministry of Petroleum and Mineral Resources’ broader strategy to boost gas and crude oil exploration by offering financial incentives and marketing unexplored, high-risk areas.

Under the proposed system, the government and foreign partners will share production returns in a way that aligns Egypt’s offering with international standards, particularly in the event of large discoveries and higher-than-expected profits.

This would mark a shift from traditional agreement structures to a more dynamic model that encourages sustained exploration and development.

ExxonMobil has already completed a 3D seismic survey covering approximately 11,000 square kilometers and is currently evaluating the data ahead of potential exploratory drilling.

If results are promising, the company is expected to prepare an integrated development plan for the two blocks.

The new production-sharing system still requires approvals from relevant state authorities.

However, it is seen as a key incentive for companies to accelerate investment and exploration, particularly in untouched areas.

The ministry confirmed its commitment to fully supporting serious investors as part of its ongoing efforts to increase national production and meet consumer and development needs.

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