Exxon Mobil Considering Investing In Egypt’s Offshore Oil Production Sector

Reports indicate that Exxon Mobil is considering investing in the offshore gas and oil sector of Egypt following the success that the energy giant’s rivals have recorded in the North African country. Tarek El Molla, the Egyptian petroleum minister, disclosed that officials from Exxon Mobil recently held discussions with the country’s petroleum regarding upstream operations.

Currently Exxon Mobil lacks any upstream operations in one of Africa’s most populous countries but is now considering exploring areas in the offshore basin of the Mediterranean. This coincides with a move by Italy’s Eni to start producing gas from a field located in the Mediterranean. According to sources the success that Eni has recorded in the Zohr field has forced Exxon Mobil to reassess its position.

Red Sea

Other opportunities that Exxon Mobil is considering includes exploration blocks in the Red Sea which are soon going to be made available. According to BP, Egypt’s reserves of oil in 2016 were 3.5 billion barrels while those of natural gas were close to two trillion cubic meters. In a bid to resuscitate a struggling economy Egypt has been making efforts aimed at attracting foreign investment to its oil sector.

Besides Eni, some of the oil majors that are operating in Egypt include Royal Dutch Shell and BP. The operations of the latter two are mostly in the offshore shore production of natural gas. Currently Egypt’s natural gas is mostly for domestic use but plans are underway to start exporting.

Oil prices

Like many of its rivals Exxon Mobil has reduced spending in the wake of a fall in the prices of oil. This has seen the oil giant’s reserves fall making it necessary to consider new investments in order to recoup.

Exxon’s interest in Egypt coincides with a Senate committee in Australia indicating that it will investigation the tax records of the oil major after revelations were made that the Irving, Texas-based company did not pay any corporate income tax for at the minimum two years. According to tax records released by ATO – Australia Tax Office, Exxon in 2013-2014 as well as in 2014-2015, did not pay any corporate tax as it reported no taxable income. This was despite the fact that the company reported an annual income in both instances.

“The scale of Exxon is significantly smaller than Chevron, but it looks like they are even more aggressive in their tactics,” Jason, of the Tax Justice Network, said.

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