Blocks in the Nile Delta, Suez Canal and Western Desert are being offered based on production sharing agreements under the auction announced on Monday by state-owned companies Egyptian General Petroleum Corporation and Egyptian Natural Gas Holding, Reuters reported.
A bid deadline of 19 May has been set for the tender, according to the announcement advertised in state-run newspapers under the banner of the Oil Ministry.
A ministry spokesman said the time was sufficient for companies to prepare their offers but gave no further details.
Exploration companies have been hesitant to develop untapped gas finds in Egyptian waters partly because the amount the government pays them barely covers their investment costs.
Egypt pays offshore gas producers on average around $2 to $3 per million British thermal units, according to industry estimates. Comparable payments for gas in the UK are currently above $10 and for Asian supply above $17.
Egyptian officials have suggested pricing arrangements should be changed to reflect the high costs of offshore exploration in deep water, arguing that such reform would spur new investments.
The Cairo government has now started making repayments to foreign oil companies after owing them around $6.2 billion as it stalled payments due to soaring energy bills caused by high fuel subsidies.
The subsidies have turned the country from a net energy exporter into a net importer over the last few years.
Egypt’s Cabinet earlier this month approved seven new oil and gas exploration agreements with companies including BP, Dana Gas and Petroceltic intended to generate investment of at least $1.2 billion for the energy sector.