Local firms win Egyptian oil blocks over foreigners

Jan 15, 1997 01:00 AM

Jan. 4, 1997 Egypt has awarded oil exploration concessions to two local private-sector companies, both of which made better offers than their foreign rivals, the Egyptian General Petroleum Corporation (EGPC) said. Abu El-Fouttouh, a company led by prominent Egyptian businessman Hossam Abu El-Fouttouh, won the Central Sinai block, an onshore area of 18,150 sqkm (7,010 sqml. It beat off competition from US Apache and British-based LK Exploration. Another Egyptian company, Eatco (Egyptian Arab Trading Company), chaired by Yahia el-Komi, won the North Gharib concession, an offshore block of 712 sqkm (275 sqml) in the Gulf of Suez. Eatco's rival for the award was US Pennzoil. The conditions for the Central Sinai block are that Abu El-Fouttouh must invest $ 6 mm during an initial phase of three years, complete 500 km of two-dimensional seismic and 200 sqkm of 3-D seismic, drill four wells and pay a signature bonus of $ 1 mm. For the North Gharib block, Eatco must spend $ 16 mm over an initial phase of three years, drill four wells and pay a signature bonus of $ 800,000. If the companies find oil in commercial quantities, they can take 35 % of it for the first four years to recover their costs. The EGPC bid committee will meet again later this month to look at three bids for the West Beni Suef block, which covers 38,000 sqkm (14,700 sqml) west of the Nile valley. The bids, which arrived after the deadline expired last year, are from Apache, Global Natural Resources and Pennzoil. Apache and Global Natural Resources are 50-50 partners in the adjacent East Beni Suef concession, with Global Natural Resources as operator.

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