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Egypt is offering a production-sharing contract based on the profitability factor (R-Factor) to foreign oil companies in new concessions for the first time as part of its latest global exploration push.
The petroleum and mineral resources ministry announced on its bidding portal last week that it has launched a fresh global tender for oil and gas exploration in four blocks in the Red Sea within an ongoing drive to maximise its hydrocarbon resources.
The state-owned South Valley Egyptian Petroleum Holding is staging the new round, which has Egypt’s longest oil bidding deadline stretching up to six months.
The ministry said in a statement published by the cabinet on its Facebook account that it has set a long deadline until 3 May to allow sufficient time for international companies to study the proposed areas and prepare their investment proposals with the “highest level of accuracy and technical efficiency.”
“For the first time, modern mechanisms are applied in this tender to incentivise global companies to inject new investments into virgin areas and deep waters, through a production-sharing system based on the profitability factor (R-Factor), in proportion to the size of the risks and investments,” the ministry said.
Egypt has embarked on a large-scale oil and gas exploration programme with the help of global oil giants to boost production and hydrocarbon reserves.
Last month oil and mineral resources minister Karim Badawi unveiled a five-year plan to invest $5.7 billion in oil operations, involving the drilling of 480 wells.
(Writing by N Saeed; Editing by Anoop Menon)
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