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Egypt is tackling its energy shortfall by raising the gas price at a number of projects that are uneconomic under the parsimonious terms that govern natural gas production.
The pragmatic approach is set to boost output while stopping short of a wholesale revision of the gas price, ensuring that incremental supply comes at minimal cost. But it could see producers negotiate several deals for a single concession, and leave them uncertain over future cash flows.
State firm Egyptian Natural Gas Holding Company (EGAS) is currently negotiating revised prices for offshore acreage and onshore fields with high exploitation costs. It has struck deals with Shell and Apache, according to a source at the US independent, while a statement released by the Oil Ministry said deals had been reached with ENI, Edison and RWE, while negotiations are ongoing with BG. All deals have yet to be sanctioned by the government. (CONTINUED - 1204 WORDS)