Egypt seeks oil outside its borders for first time

Egypt bought a stake in a block in Iraq from Kuwait Energy making it the first time in Egypt’s history to explore for oil outside its borders, Minister of Petroleum, Tarek El-Molla, said Wednesday.

The deal with Kuwait Energy leaves Egypt with 10 percent of Block 9 in Basra in Iraq, a statement released by the ministry revealed.

The deal “is seen to meet the domestic needs for energy consumption as well as raising the country’s revenues on the back of diversifying petroleum investments,” said El-Molla in the statement.

Egypt has turned into a net importer of natural gas from a net exporter in the past few years on the back of rising consumption and falling productions.

The country’s energy sector, already experiencing an energy crunch since the summer of 2008, took a blow following the 2011 uprising as arrears to foreign oil firms accumulated and production slowed.

El-Molla said that the recent agreement, which follows from an earlier agreement in March, improves Egyptian-Kuwaiti-Iraqi relations.

Saudi Arabia, the United Arab Emirates and Kuwait, allies with the current Egyptian government, have showered the country with more than $30 billion since the ouster of Muslim Brotherhood president Mohamed Morsi in 2013 following mass protests against his rule.

Egypt garnered some $40 billion in energy deals during the international development conference held in March as part of the government’s plans to boost an economy battered by more than four years of political upheaval.

The estimated reserves for the block are 7 billion barrels and the actual production is planned to start in October this year.

The productivity of the first well that was dug, Fayhaa, is 11600 barrel per day.

Source: Ahram Online