Arab Finance: The House of Representatives’ Energy and Environment Committee has approved a draft law authorizing the Minister of Petroleum and Mineral Resources to sign a concession agreement with the Egyptian Natural Gas Holding Company (EGAS) and Cheiron Egypt Delta Limited for natural gas and crude oil exploration and exploitation in the East Alexandria Offshore Area in the Mediterranean Sea, Almal News reported.

The committee, chaired by former Minister of Petroleum and Mineral Resources Tarek El-Molla, approved the legislation as part of the state’s efforts to expand exploration and production activities and increase the use of its natural resources.

Under the proposed production-sharing agreement, Cheiron Egypt Delta Limited will invest at least $42.2 million, drill three exploratory wells, and reprocess seismic data in the concession area. The company will also pay EGAS a non-refundable signing grant of $1 million.

The agreement sets the cost-recovery rate at 40%, while EGAS will receive between 64% and 70% of oil and gas profits, depending on production levels and Brent crude prices.

According to the draft law’s explanatory memorandum, EGAS offered the East Alexandria offshore area through an international bid round. Cheiron Egypt Delta Limited submitted the winning offer after the company’s technical committees assessed its economic feasibility and expected returns to the state.

The memorandum added that the draft agreement had secured the required approvals from the Egyptian Armed Forces Operations Authority and EGAS’s board of directors, allowing the legislation to proceed toward ratification.