Dragon secures approval on bid for site off coast of Egypt
Dublin-listed Dragon Oil has secured initial government approval on its bid for a site off the coast of Egypt.
The block is located offshore in the southern Gulf of Suez region, beside several oil-producing fields.
Known as Block 19 East Zeit Bay, it is one of 20 exploration blocks in that region, which recently opened up to bidders.
The bid must still go through a final government approval process before Irish-listed Dragon is officially awarded a 100pc licence in the site.
The company now plans to perform a seismic study of the block, which covers 90 square kilometres in shallow waters ranging from 10 to 40 metres deep, and drill two exploratory wells.
"The block's location in shallow waters fits well with our expertise and represents a strategic move for Dragon Oil in the country rich in hydrocarbon resources and opportunities," said chief executive Dr Abdul Jaleel Al Khalifa.
This is the company's first foray into Egypt. It is active in Turkmenistan, Iraq, Afghanistan and Tunisia – but only one of its fields is currently producing oil, located beneath the Caspian Sea off the coast of Turkmenistan. The rest are still at earlier stages of development.
The group is headquartered in Dubai and controlled by the government of Dubai, but registered in Ireland and listed on the Irish Stock Exchange.
In October, it downgraded its outlook for production growth this year to between 9pc and 10pc, from a previous guidance of 10pc to 15pc.
It said this was a result of having drilled fewer wells than expected.
Dragon's share price has gained 2pc since Wednesday, trading at €6.86 yesterday afternoon.