Abu Dhabi-listed Dana Gas said it had won a bid in Egypt to develop an offshore block in the Nile Delta and would go ahead even while the Egyptian government struggles to meet overdue payments.
Egypt owes at least $5 billion to oil companies, half of it overdue, as the government tries to avoid public unrest by subsidising fuel prices. The country owes Dana around $230 million for gas supplies.
"The award of this concession demonstrates Dana Gas's confidence in Egypt over the long term," said Rashid Al-Jarwan, the company's executive director, said in a statement on Monday.
"We continue to engage in a constructive dialogue with government entities and the Ministry of Petroleum to resolve the issue of the outstanding receivables," he added.
Egypt's state-owned Egyptian Natural Gas Holding Company (EGAS) awarded Dana 100 percent working interest in the North El Arish Offshore concession area in the eastern part of the Mediterranean Sea, the company said.
The concession entails an eight-year exploration period comprised of three phases, starting with an initial four-year exploration period and two additional two-year extension periods.
A 20-year development lease period will be granted based on an approved commercial discovery, the company added.
Currently in the Nile Delta, Dana Gas produces gas and associated liquids from 10 fields, and once the payment issues are resolved with the Egyptian government it has plans to boost its output from the El Wastani plant to more than 180 million cubic feet per day.
Dana Gas also announced that it had pre-qualified as a non-operator in Lebanon's first offshore licensing round.
Ten deep-water exploration blocks are available, ranging from 1,500 to 2,500 square kilometers, the statement said.
Lebanese Energy Minister Gebran Bassil earlier this week said the country had selected 46 international oil companies to bid for gas exploration in its Mediterranean waters.
Bassil said 12 firms could bid as operators and the other 34 could bid as non-operators in the licensing round, which opens on May 2 and starts a process that should lead to agreement on exploration licenses by March next year.
Lebanon hopes that sizeable gas discoveries could help address both its high government debt and chronic domestic power shortages, but its initial steps towards exploration have been plagued by delays.For all the latest energy and oil news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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