Pharos Energy has secured approval from the executive board of the Egyptian General Petroleum Corporation (EGPC) to bring together two concession agreements into a new consolidated concession.
This agreement combines the El Fayum (EF) and North Beni Suef (NBS) concessions in Egypt’s Western Desert region.
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Pharos will hold a 45% working interest in the new consolidated concession, while IPR Lake Qarun Company will continue to be the operator with a 55% interest.
The consolidated agreement will include 12 development leases for the EF and NBS concessions and three new exploration areas.
The consolidated concession is expected to create substantial value in the Western Desert by enhancing specific fiscal terms, prolonging the licences’ duration, and obligating Pharos and IPR to undertake additional work programmes aimed at driving production growth, stated Pharos.
According to Pharos’ competent person’s reports (CPR) as of 31 December 2024, the consolidated concession could facilitate the transition of 3.1 million stock tank barrels from contingent resources to proven and probable (2P) reserves, representing a 25% increase from the end of 2024, attributable to Pharos’ working interest.
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By GlobalDataThe new consolidated concession plan is subject to customary approvals and Egyptian Parliamentary ratification, expected by late 2025 or early 2026. However, the new terms will be implemented soon.
Pharos Energy CEO Katherine Roe said: “The approval by EGPC’s Executive Board of the new consolidated concession is a significant milestone for our Egyptian business.
“The improved fiscal terms have the potential to unlock long-term value for all stakeholders and drive organic growth opportunities across the concession areas.
“I would like to thank IPR’s and Pharos’ in-country teams for their tenacity and diligence in concluding negotiations, and the Egyptian authorities for their positive engagement throughout the process.
“We look forward to planning the start of our drilling campaign to increase production.”
The 12 development leases currently associated with the EF and NBS concessions have been granted an extended term of up to 20 years. This includes an initial 15-year period, with the possibility of a five-year extension, subject to ministerial approval.
The new consolidated concession features a commitment to a comprehensive 11-well work programme, which entails drilling eight development wells, two exploration wells and one water injector over the next four years, starting imminently.
Additionally, three exploration areas have been awarded under the consolidated concession: West Silah, Beba and South Wadi El Rayan. Development leases from these exploration areas will have a maximum term of 30 years, consisting of an initial 20-year period and two five-year extensions, each requiring ministerial approval.
To encourage increased production through investment, improved fiscal terms have been established. These include an increase in cost oil to 40%, a profit oil share ranging from 27% to 29% in key production and oil price tiers – up from the current 18–22.5% – and an excess cost recovery share of 15%, stated Pharos.
In addition to the 11-well investment programme, Pharos has agreed to forgo 30% of the carry-forward cost pool.
