Egypt is working on a new production sharing model with foreign energy companies to encourage oil and gas exploration in deep waters, Petroleum Minister Tarek El Molla said on Thursday.
"We are thinking of having... a simpler way of having the calculations with our partners," Molla said during a U.S. business meeting in Cairo.
"So far the feedback that we received from different partners is very positive and they are enthusiastic to participate in the bid round on this basis," he said.
Under the new model, companies will be offered a share of production in exchange for bearing the costs of exploration and production.
"It will be all together and one figure that includes cost recovery and the profit share of the partner, so we don't go towards what we call cost recovery audits, which sometimes take effort, (create) arguments between different departments and,...for new frontier areas, it wouldn't be encouraging."
Molla said that bigger oil companies wanted the new model especially for risky deepwater frontier areas in the Red Sea and the Mediterranean near the Libyan border that are coming up in the next two bid rounds.