Egypt has awarded an oil and gas exploration concession in the Red Sea Block 4 to Abu Dhabi's Mubadala Petroleum, according to the company.
Mubadala Petroleum will hold 27 per cent participating interest in Block 4, which is operated by Shell, the Abu Dhabi company said in a statement on Thursday. Shell has a 63 per cent participating interest in the block while Tharwa, a state-owned Egyptian exploration and production company, holds a 10 per cent stake.
The Red Sea Block 4 has an estimated area of 3084 kilometre square and is owned by the South Valley Egyptian Petroleum Holding Company (Ganope).
"This new exploration block will support our strategy of finding and, if successful, developing hydrocarbons for Egypt’s expanding market and delivering organic growth opportunities to add to our existing business in the country," Bakheet Al Katheeri, Mubadala Petroleum’s chief executive, said.
The agreement builds on Mubadala Petroleum's Egypt portfolio that includes a 10 per cent stake in the Shorouk concession, containing the Zohr gas field, and a 20 per cent stake in the Nour exploration concession. Both are located in the Mediterranean Sea offshore Egypt.
Mubadala Petroleum is entirely owned by Mubadala Investment Company, the Abu Dhabi-based strategic investment firm. The subsidiary's chief executive said the new Red Sea deal is a "high impact growth opportunity alongside a world class partner in Shell".
Red Sea Block 4 was awarded by the Egyptian government in the 2019 Red Sea Licensing.
Block 4 is located in the northern Red Sea in an area adjacent to the Gulf of Suez basin.
The concession has the potential to unlock substantial new prospects, Mubadala Petroleum said. The work commitment for the block is to conduct subsurface studies and to acquire 3D seismic during the initial three year term.
Egypt, which was traditionally been highly reliant on energy imports, has benefited massively from its discovery of the Zohr field through Eni in 2016 in the Eastern Mediterranean.
The discovery sparked search for more hydrocarbon resources along the Nile Delta and western desert as the North African country looked to leverage these discoveries to become a net exporter of gas, particularly to markets in Europe.
Egypt recently signed nine oil and gas exploration deals worth $1 billion with local and international energy companies, allowing them to conduct exploration along the eastern and western Mediterranean as well as the Red Sea.
Exxon Mobil, Chevron, BP, Total and Shell will drill 17 wells to explore for oil and gas finds, Tarek El Molla, Egypt's petroleum minister, said in a statement in January.