Egypt Upstream (Oil and Gas) Fiscal and Regulatory Guide
All the vital news, analysis, and commentary curated by our industry experts.
Egypt offers upstream acreage in the form of production sharing agreements (PSAs) and in some cases through service contracts. Several blocks have been awarded during the last few years due to a renewed investment interest after significant Mediterranean gas discoveries, improved gas pricing, and wider energy sector reforms. Supermajors such as BP, ENI, and Shell have strengthened their presence in the country while ExxonMobil and Chevron are few of the new entrants. Following the success of recent licensing rounds, EGPC and EGAS have launched a new bid round between March-August 2021, offering 24 blocks in the Mediterranean Sea, Gulf of Suez and Western Desert. Although, Egypt’s fiscal terms are generally more burdensome than those offered in neighboring Israeli, Cypriot and Greek waters, this is counterbalanced by the benefits of Egypt’s more developed sector, such as infrastructure availability and strong local gas demand. The fiscal terms remain more attractive than those offered in neighboring Libya and slightly better than in Sudan. The restart of Damietta’s LNG plant in 2021 after nine years will enhance further Egypt’s export LNG capacity and flexibility. Although, regional maritime border disputes in the East Mediterranean are ongoing, the deal between Egypt and Greece in 2020, the cancellation of Turkey-GNA Libya’s agreement in early 2021 and the political reproachment between Turkey and Greece can favour regional cooperation.
“Egypt Upstream (Oil and Gas) Fiscal and Regulatory Guide”, presents the essential information relating to the terms which govern investment into Egypt’s upstream oil and gas sector. The report sets out in detail the contractual framework under which firms must operate in the industry, clearly defining factors affecting profitability and quantifying the state’s take from hydrocarbon production. Considering political, economic and industry specific variables, the report also analyses future trends for Egypt’s upstream oil and gas investment climate.
Overview of current fiscal terms governing upstream oil and gas operations in Egypt
Assessment of the current fiscal regime’s state take and attractiveness to investors
Charts illustrating the regime structure, and legal and institutional frameworks
Detail on legal framework and governing bodies administering the industry
Levels of upfront payments and taxation applicable to oil and gas production
Information on application of fiscal and regulatory terms to specific licenses
Outlook on future of fiscal and regulatory terms in Egypt
Reasons to Buy
Understand the complex regulations and contractual requirements applicable to Egypt’s upstream oil and gas sector
Evaluate factors determining profit levels in the industry
Identify potential regulatory issues facing investors in the country’s upstream sector
Utilize considered insight on future trends to inform decision-making
Table of Contents
Table of Contents
1. Executive Summary
1.1 Regime Overview – Production Sharing Agreements (PSAs)
1.2 Regime Overview – Service Contracts
2. State Take Assessment
3. Key Fiscal Terms – Production Sharing Agreements
3.1 Royalties, Bonuses, and Fees
3.2 Cost Recovery
3.3 Profit Sharing
3.4 Direct Taxation
3.5 Domestic Market Obligations
3.6 Local Content
4. Key Fiscal Terms – Service Contracts
4.1 Royalties, Bonuses, and Fees
4.2 Baseline Service Fee
4.4 Direct Taxation
5. Regulation and Licensing
5.1 Legal Framework
5.2 Institutional Framework
5.3 Licensing Process
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List of Tables
Table 1: Regime Overview
Table 2: Egypt, Key Events Since Year 2000
Table 3: Egypt, Average Winning Signature Bonus (US$) For Bid Rounds
Table 4: Egypt, Production Bonus Thresholds (US$), EGPC
Table 5: Egypt, Production Bonus Thresholds (US$), EGAS
Table 6: Egypt, Production Bonus Thresholds (US$), GANOPE
Table 7: Egypt, Cost Recovery Limits (%), Various Concessions
Table 8: Egypt, Minimum NOC Share Of Excess Cost Recovery Rates (%), Bid Rounds 2015-2021
Table 9: Egypt, EGPC Profit Sharing (%), Bid Round Model 2021, 2018, and 2016
Table 10: Egypt, EGPC Profit Sharing (%), East Ras Qattara Concession, 2004
Table 11: Egypt, EGPC Profit Sharing (%), NW Gemsa Concession, 2002
Table 12: Egypt, EGAS Profit Sharing (%), Bid Round Model 2021, 2018 and 2015*
Table 13: Egypt, EGAS Profit Sharing (%), South Disouq Concession, 2014
Table 14: Egypt, EGAS Bid Round 2012, Profit Sharing (%), Shorouk Concession
Table 15: Egypt, EGAS Profit Sharing (%), North El Maghara Concession, 2007
Table 16: Egypt, GANOPE Profit Sharing (%), Bid Round Model 2019
Table 17: Egypt, GANOPE Profit Sharing (%), Bid Round Model 2016
Table 18: Egypt, GANOPE Profit Sharing (%), Bid Round Model 2014 and 2012
Table 19: Egypt, GANOPE Profit Sharing (%), Bid Round Model 2006
Table 20: Egypt, Tariff Fee, West Gharib Block H Service Contract
Table 21: Egypt, Licensee’s Remuneration (% of incremental production), Area A Service Contracts
Table 22: Egypt, Licensee Remuneration (% of incremental production), Issaran Service Contract
Table 23: References
List of Figures
Figure 1: Regime Flow Chart – Production Sharing Agreements
Figure 2: Regime Flow Chart – Service Contracts
Figure 3: Egypt, Indicative NPV10/boe, IRR and State Take Comparison, and Price and Cost Sensitivity Analysis
Figure 4: Egypt, Legal Framework
Figure 5: Egypt, Institutional Framework
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