Abu Dhabi: Dana Gas, a Sharjah-based natural gas company, announced that it was on track in its growth strategy in Egypt with the signing of Blocks 1 and 3 Concession Agreements in the Nile Delta.
The newly awarded Block 1 is expected to extend the company’s shallow gas production business onshore the Nile Delta.
In Block 3, Dana Gas will participate on a 50 per cent basis with British Petroleum as partner and operator.
The signing follows other positive developments including the signing of the Gas Production Enhancement Agreement (GPEA), and the payment made the Egyptian government in December.
The GPEA allows the company to enhance production, and to start recovering its outstanding receivables over the next few years. This is in addition to the payments made to the industry by the Egyptian authorities.
Following the signing of this GPEA agreement, a $60 million (Dh220 million) payment was made to Dana Gas by the Egyptian Government in December 2014 as part of its payments.
This accounts for 28 per cent of the total overdue receivables of $212 million (Dh778 million) and will be used to fund future investment requirements and also address operational expenses in Egypt.
Patrick Allman-Ward, chief executive officer of Dana Gas, said the company was expected to deliver strong growth in Egypt in the short-term as a result of the GPEA and the payment from the government.
“We have also secured medium-term growth potential through our successful bids for these two new exploration blocks in the Nile Delta. We see this positive momentum continuing, and are excited about our exploration and development plans in Egypt,” the CEO said.
