Egyptian Concession Agreement

Another area, which is problematic under the current model, concerns different types of wells. Under the current model (including Article IV), the difference between exploratory drilling and assessment drilling is not clearly defined. Without clearly defining the difference and usefulness of each drilling, oil companies have the option of counting the evaluation drilling within the exploration drilling that must be drilled in accordance with the work program. This will affect the number of exploratory drillings and, therefore, affect the contractors` obligations under the agreement. Below is a brief summary of some of the main points that a contractor should consider when entering into a concession: the total signing bonuses of these agreements amounted to $285.25 million and the minimum financial commitments during the exploration phases of these agreements amount to approximately $4.7 billion for seismic 2D and 3D acquisitions, geological and geophysical studies and the drilling of 178 Exploratory drilling. Eni also signed two other agreements yesterday with EGPC and other international oil companies. A $22.5 million deal was signed with BP to drill four boreholes in the Nile Delta`s Nooros settlement, while an $11.7 million deal was signed with the Croatian INA for nine drills in the Western Desert Ras Qattara concession, according to a statement from the Oil Ministry. After the signing, El Molla said the government will conclude more oil and gas deals in the near future, while continuing its plan to turn Egypt into a regional energy export center. Below is a comprehensive but non-exhaustive analysis of the current concession contract model used in the oil and gas sector in Egypt. The model is mainly used for oil exploration and exploitation. Since I have gained a broad legal overview of working with such agreements, I propose this analysis in order to examine the current model and to constructively examine the problems under the current agreements. During the development phase, EGPC and the contractor will set up an operating company (a private sector company or some kind of public limited company) based in Cairo. This operating company is not subject to the Egyptian Commercial Companies Law, but is a transparent, non-taxable and non-profit company.

The objective of the company is to act as an agent through which the CEPC and the contractors carry out development operations. The development company may not carry on operations or activities going beyond the operations defined in the concession and may not hold any rights in the oil produced or in any of the assets or land acquired or exploited in the course of such operations. . . .

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