Report: Chevron and other companies exit Egypt’s Red Sea concessions, redirect resources

A number of multinational oil and gas companies including Chevron have exited their Red Sea oil and gas concession blocks after making no finds and have channeled their resources elsewhere in the country, according to a recent Reuters report.

The report cited statements from the Egyptian petroleum ministry. 

As part of its efforts to become an energy hub, Egypt had awarded oil and gas exploration concessions in the Red Sea for the first time to Chevron, Shell and Abu Dhabi sovereign wealth fund Mubadala Investment Company in an international tender in 2019.

“Companies have spent millions on their concessions within the agreed time frames,” ministry spokesperson Moataz Atef was quoted to say in the Reuters report. “One company spent $34 million on a contract that initially stipulated it will invest $10 million on exploration, but found no results.” Atef did not name the company.

Chevron confirmed that it had relinquished its operated 45% stake in Red Sea block 1, located in the northern Red Sea.

“Chevron remains committed to working together with the government of Egypt and our partners to support the growth of Egypt’s energy sector through our exploration programs in the Mediterranean,” spokesperson Sally Jones said in a statement on Friday.

Chevron operates the block along with other shareholders including Australia’s Woodside Energy. Shell operates block 3 with others including Woodside Energy and QatarEnergy.

Atef did not name the other companies that he said had relinquished their Red Sea blocks. Shell reportedly declined to comment. Mubadala, Woodside Energy and QatarEnergy were not immediately available for comment, according to the Reuters report.

The petroleum ministry spokesperson stressed that his ministry still believed that the concession areas could be fruitful. He said that both Shell and Chevron had applied for new concessions in the Mediterranean Sea, reaffirming their commitment to Egypt’s oil and gas sector, without giving further details.

The Chevron spokesperson said that the company had interest in three other exploration blocks in Egypt, including two as an operator in the Mediterranean.