Egypt drawing in big energy players

With government settling debt, Eni signs concession agreement in Egypt.

By Daniel J. Graeber

MILAN, Italy, Jan. 9 (UPI) -- With payments surfacing for its counterparts, Italian energy company Eni said Friday it signed an deal to operate in a license area in Egypt's Western Desert.

Eni said it was strengthening its position in Egypt by signing a concession agreement for work in the Western Desert. The deal follows an international auction held in 2013 by the Egyptian General Petroleum Corp.


"This new acquisition adds to the list of exploration successes achieved in the area over the past two years and further strengthen Eni's position in Egypt, an area of historic and strategic importance for the company," it said in a statement.

Eni is one of the main oil producers in the country. Operating there since 1954, the company said it had an equity production of around 210,000 barrels of oil equivalent per day.

The agreement follows the emergence of government settlement of debt owed to energy companies with a legacy of operations in the country. Middle East focused exploration company Circle Oil said Friday it was the latest to receive a $15 million payment distribution from Cairo, which significantly reduces the amount of debt owed to the company.


"We are delighted to have received this special payment which, both for Circle and in the larger industry context, should be seen as a very positive step," the company's Chief Executive Officer, Chris Green, said in a statement.

Political and economic instability in Egypt has left the government in debt to energy companies eager to tap the country's reserve potential. The government recently agreed to cover at least $2 billion owed to a group of operators collectively.

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