Capricorn, Cheiron sign $208mn deal to expand gas exploration in Egypt’s Western Desert

Egyptian General Petroleum Corporation (EGPC) has signed an agreement with Capricorn Energy (LSE: CNE) and Cheiron to expand oil and gas exploration and production activities in the Badr El-Din area of the Western Desert, according to a statement by the Ministry of Petroleum and Mineral Resources, cited by Al Mal on May 19.

Cheiron is Egypt's largest independent, domestic exploration and production (E&P) company. EGPC is an Egyptian state oil company that operates under the Ministry of Petroleum and Mineral Resources. Capricorn Energy is a London-listed independent oil and gas exploration and production company whose primary yielding assets are concentrated in Egypt's Western Desert following its strategic shift away from the UK North Sea. 

The agreement provides for accelerated investments totalling at least $208mn to support expanded exploration, development, and production activities aimed at increasing oil and gas output and adding new reserves. The five-year work programme includes drilling 44 production and exploration wells, one of the agreement’s main priorities, to strengthen production capacity in the region.

Under the deal, eight Western Desert concession areas currently operated by Badr El-Din Petroleum Company, a joint venture between the EGPC, Cheiron and Capricorn, will be merged, along with the addition of new exploration blocks. This will increase the total area dedicated to exploration, development and production activities to around 6,181 square kilometres. The expanded footprint is expected to enable more intensive exploration and development work.

The agreement is intended to strengthen exploration and production plans across Badr El-Din operating areas and create new opportunities for reserve growth. The programme also includes upgrading production infrastructure, particularly the Badr-3 processing facility, reprocessing seismic data, and conducting a 500-square-kilometre 3D seismic survey to improve geological analysis and identify new production opportunities.