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CAIRO, March 23 (Reuters) - Egypt has agreed to payGermany-based DEA 40 percent more for the natural gas itextracts in the Nile Delta Desouk region, the oil ministry saidon Monday.
The agreement marks the latest move by Egyptian authoritiesto improve terms for foreign oil and gas firms in the hope thatmore competitive pricing will encourage investment in theenergy-hungry country.
"Under the agreement, the price of new gas will be raisedfrom $2.50 for every million British thermal units (mmBtu) to$3.50," the ministry said in a statement.
It also said that DEA would increase average natural gasproduction in the Desouk development to 210 million cubic feet(mcf) per day by this summer, from current rates of 145 mcf.
Average production would then rise to 300 mcf per day by thesummer of 2016, the statement said.
Egypt was once an energy exporter but declining oil and gasproduction and increasing consumption has forced the governmentto divert energy supplies to the domestic market.
The government has sought in recent months to increase whatit pays foreign firms for gas in the domestic market, toencourage them to raise exploration and production.
The oil minister told Reuters this month that Egypt hadagreed to raise the prices it pays Edison and BP.
Egypt is also close to a deal with BG to raise theprice of natural gas to about $5.88 per mmBtu of gas producedfrom the West Delta Deep Water concession, from $3.95 before,oil minister Sherif Ismail has said. (Reporting by Ehab Farouk; writing by Shadi Bushra; editing byJason Neely and Yara Bayoumy)
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