Newsletter No. 28
June 28, 2005

 

TEIKOKU OIL GAINS NEW CONCESSIONS IN EGYPT

Two news items in regard to Japan-Egypt relations have recently appeared in the Nihon Keizai Shinbun. First of all, the Teikoku Oil Company has just been granted oil prospecting rights in two separate regions in Egypt. Although Egypt is not a major oil country, it does have some reserves and is trying to develop more. The new contract between the Egyptian government and Teikoku Oil will be signed at the end of July and will come into effect at the beginning of 2006.

This is not Teikoku Oil’s first project in Egypt. In fact, Teikoku Oil has been producing oil on a field near the Suez Canal since 1980. This field current produces about 5,000 barrels daily. The website of the Teikoku Oil Company has some additional details (in Japanese):

http://www.teikokuoil.co.jp

JAPAN DEVELOPMENT BANK TO ASSIST “GREAT EGYPTIAN MUSEUM”

The other story in regard to Japan-Egypt relations is that the Japan Development Bank will provide loans over US $2 million for the construction of a “Great Egyptian Museum” and a historical tourist zone that will be located about two kilometers from the pyramids in Cairo. The museum will house the Mask of Tutankhamen and is scheduled to open in 2009. Japan may also play a role in administering the museum after it opens.

The following announcement appeared at the Japan’s Corporate News Network:

Teikoku Oil Announces New Ventures in the South October and North Qarun Blocks, Egypt

Tokyo, Japan, June 27, 2005 - (JCN Newswire) - Teikoku Oil Co., LTD. (TSE: 1601) is pleased to announce that the company has been awarded two exploration blocks in the Arab Republic of Egypt under the following conditions:

1 . South October Block (446km2)
(1) Location : Middle part of Gulf of Suez (approx. 250km southeast of Cairo)
(2) Participating Interest : Devon Energy Corporation (65%) and Teikoku (35%)
(3) Obligatory works : Two (2) exploratory wells and acquisition of 3D seismic data (270km2) with investment of US$17MM in the initial 3-year exploration period

2 . North Qarun Block (4,901km2)
(1) Location : Western Desert (western part of Cairo)
(2) Participating Interest : Devon (50%) , Santos Limited (25%) and Teikoku (25%)
(3) Obligatory works : Two (2) exploratory wells and acquisition of 2D seismic data (550km) with investment of US$5MM in the initial 3.5-year exploration period

Teikoku plans to establish two wholly owned subsidiaries and transfer all of its Participating Interest to such companies.

Teikoku has been conducting production operations in West Bakr Block (45.2km2) as Operator since 1975 through its affiliate, The Egyptian Petroleum Development Co., Ltd. and exploratory operation with Devon and Santos in the South East July Block locating southeast of the West Bakr Block, trying to bring greater synergies effect in the Republic. In addition, the company is consistently pursuing further successful operations in the priority regions of North Africa, by activating operations in the Republic, the forefront of its business development.

Additional Sources:

Nihon Keizai Shinbun, “Teikoku Sekiyu—Ejiputo de Tanko (The Teikoku Oil Company Will Prospect for Oil in Egypt),” Nihon Keizai Shinbun, June 25, 2005.

Kanazawa, Yoshiaki, “Piramiddo Chikaku ni Enshakkan de Hakubutsukan—Ittai o Rekishi Kanko Zoon ni (A Museum Will Be Built Near the Pyramids with a Yen Loan: The Area Will Become a Historical Tourism Zone),” Nihon Keizai Shinbun, June 24, 2005.