Russia’s Lukoil Wins Egyptian Oil Development Contracts

Egypt’s parliament has approved several bills that authorize the Petroleum and Mineral Resources Ministry to enter into contracts with a number of foreign, including Russian companies to explore and develop its oil and gas fields.

South Valley Egyptian Petroleum Holding Company and Lukoil Overseas Egypt secured approval for a concession to explore for and produce oil at the South Wadi El-Sahl block in the Eastern Desert, while a contract will also be signed with Egyptian General Petroleum Corporation and Lukoil Egypt Limited for the neighboring Wadi El-Sahl project.

The new concessions are located next to projects that Russian oil company Lukoil is already working on, West Esh El Mallaha and Development Extension for West Esh El Mallaha.

Lukoil has had a presence in Egypt since 1995. The company’s first project in the country was the Meleiha concession, with a 24% stake; Italy’s Eni, the operator, holds 76%. Following intense additional exploration efforts, including 3D seismic surveys and exploratory drilling, several highly productive fields were discovered within the block – North Nada and Gavaher (2007), Arcadia (2010), Emri Dip (2012), Rosa North (2013) and Meleiha-West (2014). Commercial production is underway at Rosa North.

A new oil field was discovered at the Arcadia South structure in December 2020.

In 2002, Lukoil joined the West Esh El Mallaha (WEEM) concession in the Eastern Desert, near Hurghada, where production has been underway since 1998. The company joined the WEEM Extension project, located next to the WEEM block in the northeast, in February 2009. Lukoil holds 50% stakes in these two projects and is their operator, and Egypt’s Tharwa Petroleum holds the other 50%.

Under the contract, block exploration commitments were performed, which included wildcat drilling and 3D seismic surveying. Pilot operations commenced in 2010, when a 20-year development license was obtained.