The future of the African upstream energy market has been boosted by the news that Egypt has opened its latest international licensing round for offshore oil and gas acreage in the Red Sea. The licensing round comes at a pivotal point for the Egyptian energy market, with the Africa Energy Forum set to take place in the near future. The remarkable growth of the global upstream sector has led to several nations opening licensing rounds to attract outside investments in new exploration blocks.
Egypt is attempting to attract significant foreign investments in its upstream sector
For the best part of the past few decades, the African energy sector has been overshadowed by the more influential and lucrative energy developments in Europe and the United States. However, Egypt is among the African nations fostering a new era of upstream exploration, hopefully led by some of the largest energy companies in the world.
The new licensing round was announced by the Egyptian Petroleum Minister Karim Badawy while he attended the ADIPEC 2025 conference in Abu Dhabi, and will be offered by the state-run South Valley Egyptian Petroleum Holding Company (Ganope) through the pioneering Egypt Upstream Gateway (EUG) digital platform.
Egypt is set to attempt a slightly different production sharing model
For the first time ever, Egypt will offer the new licensing round under a profit-based production sharing model, also known as the R-Factor, which the Ministry states will offer more competitive and flexible terms for the litany of international energy companies interested in Egypt’s latest licensing round.
“The new bid round reflects Egypt’s commitment to creating an attractive investment environment and maximising the country’s oil and gas potential,” – Egyptian Petroleum Minister Karim Badawy
The Red Sea is one of the nation’s most promising exploration regions
The Minister reaffirmed that the Red Sea will continue to play a vital role in advancing Egypt’s upstream market through the multitude of blocks showing high potential for upstream discoveries, enabling the North African nation to develop a new hope for the upstream market.
The new licensing round offers Blocks RS-1 to RS-4 and invites bids from potential operators through May 3, 2026. The new Red Sea licensing round follows several successful developments by the largest energy companies on the market.
The development of Egypt’s upstream sector has attracted some huge companies
ExxonMobil, a massive American energy major, recently announced plans to acquire a fourth deepwater tract off the coast of Egypt in the Mediterranean. The new round and the positive outlook by potential investors outline the government’s ambitions to develop its upstream market, as demand for oil and gas is set to skyrocket.
As the African Energy Chamber has forecasted a dramatic uptick in upstream developments across the continent this year, the new licensing round offers investors a sense of calm and potential prosperity in an ever-volatile energy market.
“The African upstream sector is evolving rapidly. Frontier and emerging basins present enormous potential, but realizing that potential requires targeted investment, innovative fiscal frameworks and partnerships that can de-risk technically complex projects.” – NJ Ayuk, African Energy Chamber
The Red Sea licensing round comes at just the right time for Egypt
We suspect that it was no small accident that Egypt offered up the new licensing round in the Red Sea just in time for the African Energy Forum, which is set to take place in Paris in April of this year. The reality of the situation is that African frontier basins may offer significant opportunities for upstream developers, so get ready for a new era of upstream production in Egypt this year and into the future, thanks to the strategic licensing round opened by the government.
