Petroleum Concessions in Egypt: A Recipe for Disputes?

Abstract

The Egyptian petroleum sector has recently prospered given the new discoveries and the extensive foreign direct investments injected into the country’s vast mineral resources.This article addresses petroleum concessions governing upstream exploration and exploitation activities. Egypt continues to adopt the production sharing system as the basic contractual model for petroleum exploration and exploitation activities. However, production sharing agreements take the form of legal concessions that regulate the rights and obligations of international oil companies (IOCs), the State and the major State-owned players in the upstream sector, including the Ministry of Petroleum, the Egyptian General Petroleum Corporation (EGCP), the Egyptian Natural Gas Company (EGAS) and the South Valley Egyptian Petroleum Holding Company (GANOPE).These concession agreements are capital intensive instruments involving complex regulation of the parties’ rights and obligations and are normally entered into on the basis of a model template, the most recent of which is that of 2018.This article discusses certain categories of disputes arising in the Egyptian concession agreements practice. The article starts with an overview of the upstream petroleum sector in Egypt and then addresses certain important provisions of the Egyptian model concession agreement, before scrutinizing certain categories of disputes. The article concludes with remarks on the prevailing status quo and the intricacies of Egyptian concession agreements.