Offshore Gas Field Drilling Services Business Starts in Egypt
Toyota Tsusho Corporation has started offshore gas field drilling services business in Egypt through its joint venture, Egyptian Offshore Drilling Company S.A.E., in conjunction with the Egyptian Natural Gas Holding Company ("EGAS") and Ganoub El-Wadi Petroleum Holding Company ("Ganope"). To get the business started, the Joint Venture signed on September 25, 2008 a loan agreement totaling approximately US$500 million with a bank syndicate comprising several Japanese and Egyptian banks.
The business is investment type business where the Joint Venture, formed in May 2008 by the Company and two governmental oil and gas companies, EGAS and Ganope, both affiliated with the Ministry of Petroleum of Arab Republic of Egypt, procures and owns two new-build offshore drilling rigs and offers them to drilling services in the exploration and development of offshore gas fields located within Egyptian territorial waters. EGAS, in accordance with the charter agreement signed with the Joint Venture, will be operating and maintaining the rigs and performing the drilling, while the Company will be performing overall management of the Joint Venture as well as supplying the materials, equipment and consumables necessary for the operation and maintenance of the rigs. Ganope will be providing overall support for EGAS's activities.
The rigs will be built in Singapore, with completion scheduled for the end of 2010 and the beginning of 2011 respectively. Upon completion, the rigs will be engaged in drilling services in offshore gas exploration and development blocks within Egyptian territorial waters.
Egypt supplies its abundant reserves of natural gas to meet its domestic demand, primarily as fuel for electric power generation, while exporting liquefied natural gas (LNG). An increase in natural gas production is becoming a matter of great urgency in Egypt in order to meet growing domestic demand, as well as to promote export, and for these reasons new introduction of rigs is being keenly awaited.
The Company aims to establish an upstream to downstream natural gas business chain and considers Egypt, with its abundant reserves of natural gas, to be one of the most important countries in the upstream. The Company intends to forward with building the business chain by further growing its involvement in businesses in the area of natural gas