Egypt to Launch First Oil Exploration Bid in West Assiut

Egypt plans to hold its first global oil exploration bid in West Assiut during the second quarter of 2026, marking a historic step in the country’s push to expand domestic hydrocarbon production and attract foreign investment.

A government official, speaking on condition of anonymity to Bloomberg, said the tender will be launched by the South Valley Petroleum Company, a subsidiary of the Egyptian General Petroleum Corporation, following the completion of seismic surveys by Saudi firm Ardisys in the region.

The West Assiut blocks, considered untapped and highly prospective, will be offered under a profit-sharing model based on the R-Factor, a system recently approved for select petroleum agreements. The R-Factor structure allows companies to recover costs and earn a margin while increasing the state’s share as project profitability rises, providing strong incentives for international oil companies to explore frontier areas.

The government expects the exploration drive to contribute to a rise in national oil output to 580,000 barrels per day by June 2027, up from the current 520,000 barrels, representing an 11.5% increase.

The move aligns with Cairo’s broader strategy to boost exploration in underdeveloped regions and position southern Egypt as a new investment hub for the petroleum sector, complementing traditional production centers in the Gulf of Suez and the Western and Eastern Deserts. 

The ministry aims to provide accurate geological and seismic data to attract foreign investors and support long-term production growth.

Earlier, in November 2025, the Egyptian Ministry of Petroleum announced a new international bidding round for oil and gas in four Red Sea blocks, highlighting efforts to draw foreign capital and strengthen domestic natural gas supply.

The country has also introduced new incentives to boost gas production, including allowing exporters to sell surplus output and use proceeds to offset obligations, alongside higher purchase prices for companies’ shares of new gas production.

Egypt hopes that new exploration activities, particularly in the Mediterranean and southern regions, will secure additional energy resources to meet growing domestic demand while encouraging international companies to increase oil and gas production across the country.