Egypt and Chevron Sign Lotus Offshore Deal With a Minimum 88 Million Dollar Investment
The Egyptian Natural Gas Holding Company, EGAS, has signed an agreement with Chevron to explore for natural gas and crude oil in the Lotus offshore area of the Mediterranean, with minimum investment of 88 million dollars, the Ministry of Petroleum and Mineral Resources said on 5 October. The commitments include drilling 2 exploration wells and reprocessing 3D seismic data. Petroleum and Mineral Resources Minister Karim Badawi witnessed the signing.
A frontier block in deep water
Lotus lies about 200 kilometres off the Mediterranean coast, in water depths of 2,000 to 2,800 metres, and no deep exploration well has been drilled there before, the release said. On our reading, with water depth varying by 800 metres across the block and no earlier deep well data, the reprocessed 3D seismic data will be central to selecting drilling targets for the 2 committed wells.
The agreement was signed by Sayed Selim, EGAS executive managing director, and Chevron’s exploration manager for the Middle East, North Africa and the Mediterranean, in the presence of Chevron’s country manager in Egypt.
Chevron’s 6 Mediterranean areas
Chevron currently invests in 6 offshore areas in Egypt’s Mediterranean, the ministry said, and its work there has shown promising indicators.
Chevron’s offshore areas in Egypt’s Mediterranean
| Area | Status in the release |
|---|---|
| Nargis | Gas discovery |
| North Cleopatra, with Shell | Recent well showed promising crude oil indications |
| Lotus | Agreement announced 5 October, 2 wells committed |
| North El Dabaa | Offshore exploration area |
| North West Atoll | Offshore exploration area |
| North Simian | Offshore exploration area |
North Cleopatra lies in the western Mediterranean. Status as described in the 5 October release.
Badawi said the state’s steps to pay dues owed to investment partners had strengthened confidence and encouraged companies to raise investment and resume exploration programmes, allowing more well drilling, field development and faster production projects. He said further opportunities will be offered in the Mediterranean, the Western Desert, the Delta, the Gulf of Suez, Sinai and southern Egypt, alongside seismic survey programmes under way and planned.
Why it matters: Lotus extends exploration into a deepwater area where no deep exploration well has been drilled, backed by a committed minimum of 88 million dollars and 2 wells. With Chevron now active in 6 Mediterranean areas, including a gas discovery at Nargis and oil indications at North Cleopatra, the agreement widens the exploration map that Badawi said is key to raising Egypt’s local oil and gas output.
Outlook: The next milestones are the seismic reprocessing and the 2 exploration wells at Lotus. On our reading, the plan to offer new areas across 6 regions points to more agreements of this kind as payments to partners support investor confidence.
Sources: Ministry of Petroleum and Mineral Resources, The Edge.
