Egypt’s General Petroleum Corporation and Natural Gas Holding Company (EGAS) announced Monday they would hold an international auction on 22 concessions for oil and gas exploration in according with production-sharing agreements.
The concessions areas are in the Suez Canal, Egypt’s western desert, the Mediterranean sea and the Nile Delta.
Exploration companies have been hesitant to develop fields in Egyptian waters as the government pays them barely covers their investment costs, an average around $2-$3 per million British thermal units.
This compared to payments for gas in Britain are currently above $10, and $17 in Asia.
Egypt struggles with rising energy bills caused by the high subsidies it provides on fuel for its population of 85 million.
These subsidies have reversed the country from a net energy exporter into a net importer recently.
Egypt has started repaying some of its debt to foreign oil companies, which reached more than $6 billion earlier this year.