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Egypt in 2016 had reserves of 3.5 billion barrels of oil.
Egypt in 2016 had reserves of 3.5 billion barrels of oil.

Exxon Mobil Eyes Egypt's Offshore Energy Assets

Exxon Mobil Eyes Egypt's Offshore Energy Assets

Exxon Mobil is considering a foray into Egypt's offshore oil and gas, seeking to replicate rivals’ success in the country and boost its reserves, officials and industry sources said.

Officials from the world’s largest listed oil producer recently held talks with Egypt’s Petroleum Ministry to discuss investments in oil and gas production, known as upstream operations, Petroleum Minister Tarek El Molla told Reuters.

“We have been discussing with them, visiting them. They’ve visited us ... We are exploring all opportunities for having more and further upstreamers in Egypt,” Molla said on the sidelines of an OPEC meeting in Vienna.

“I would be happy to have them with us,” he said, adding that no decision has been made yet.

Exxon declined to comment. The Irving, Texas-based company currently has no upstream operations in Egypt, according to its website. The company is looking at exploring the eastern Mediterranean offshore basin, according to industry sources.

Italy’s Eni this month is set to begin producing gas from the Zohr field in the Mediterranean, among the country's biggest discoveries of the past decade.

“After Zohr, there was a reassessment of the portfolio profitability in Egypt” by Exxon, one source said, adding that Exxon was looking for “tier one assets” with significant potential.

Exxon is also considering opportunities in the Red Sea, where Cairo is preparing to tender exploration blocks, industry sources briefed on the matter told Reuters.

Egypt in 2016 had reserves of 3.5 billion barrels of oil and 1.8 trillion cubic meters of gas, according to BP’s Statistical Review of World Energy. Egypt has recently ramped up efforts to attract foreign investment in its oil sector to boost its struggling economy.

Along with Eni, BP and Royal Dutch Shell also have significant operations in Egypt in offshore gas production, which is consumed domestically although Cairo aims to become a gas exporter. Exxon like many rivals has curbed spending to ride out a sharp fall in oil prices in mid-2014.

With its reserves slipping, Exxon CEO Darren Woods, who took over at the beginning of the year, has gone shopping. Woods has spent or authorized more than $10 billion in investment in the Permian Basin, the largest US oilfield, and in offshore Guyana.

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