Egypt to Search for Oil in Iraq in First Foreign Venture

Reuters

CAIRO, Sept 30 (Reuters) – Egypt will search for oil outside its own borders for the first time after signing an agreement with Kuwait Energy for part of a concession in Iraq, its oil minister said on Wednesday.

Kuwait Energy will give up 10 percent of a concession in Basra, southern Iraq, for exploration by Egypt's state oil company, Tarek al-Mullah said in a statement.

"The agreement opens up the space for the oil sector to find sources of oil outside Egypt for the first time, following the example of many other countries," Mullah said.

Financial support from Gulf states such as Kuwait has helped Cairo keep its economy afloat and ease an energy crisis after the military ousted former President Mohamed Mursi of the Muslim Brotherhood in 2013 following mass protests against his rule.

Mursi's government was blamed for energy shortages shortly before his ouster.

Egypt has gone from exporting energy to being a net energy importer as domestic production has failed to keep pace with rising demand. The government is seeking alternative solutions to help the country cope with its worst energy crisis in decades.

"This is an important step for securing energy supplies from outside Egypt in order to partially meet the demands of the local market," said Mullah.

Production in the concession area's first well, Fayhaa 1, is expected to begin in October with an initial return of 5,000 barrels per day (bpd) with the number expected to reach 150,000 bpd by 2020-21.

(Reporting by Ahmed Aboulenein, editing by William Hardy)

Copyright 2017 Thomson Reuters. Click for Restrictions.

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