Cairn Petroleum secures $30mn oil exploration deal in Egypt's Gulf of Suez

EGPC has signed a new oil exploration and production agreement in the Gulf of Suez valued at $30mn, Al Ahram reported. The deal includes a $1mn signing bonus to drill four wells in the East Gamsa offshore block, part of Egypt’s older but still productive petroleum basin.

The agreement was signed with Cairn Petroleum–PECO (LSE:CNE), an international upstream operator active in mature and frontier basins. The deal aims to sustain and enhance output in the Gulf of Suez, which remains a key contributor to Egypt’s crude supply.

Petroleum Minister Karim Badawi said the contract supports the Ministry’s plan to intensify exploration to unlock new reserves and reinforce domestic production. Higher local output is expected to reduce Egypt’s import bill and support energy security amid rising fiscal pressures.

Badawi characterised the deal as a model for expanding private-sector participation in exploration and development. He said partnerships with experienced operators bring technology, capital and operational efficiencies that complement state capabilities in resource development.

The minister added that improved investment terms introduced under recent petroleum-sector reforms have increased operator interest. Officials said the Gulf of Suez and Western Desert continue attracting new bids due to established infrastructure and lower development costs.

Badawi said collaboration with companies such as Cairn–PECO is essential for applying modern drilling and reservoir-management techniques to maximise recovery and extend field life. He also highlighted the potential for near-field exploration tied to existing platforms and pipeline networks.