Egypt opens North Sinai to new oil exploration as Perenco advances Al-Fayrouz block

Egypt’s parliament has ratified a new exploration agreement covering the Al-Fayrouz onshore block in North Sinai, bringing a fresh frontier into play for the country’s hydrocarbons sector after the concession was awarded through a 2024 international bid round.

The approval, granted on 22 July 2025, was one of four exploration and production (E&P) agreements ratified in a single session. The concessions span North Sinai, the Nile Delta, the Mediterranean Sea, and the Eastern Desert — a spread that signals continued momentum in Egypt’s upstream licensing activity across multiple geological basins.

Under the Al-Fayrouz agreement, the Egyptian Natural Gas Holding Company (EGAS) — the state entity that oversees natural gas sector activities and manages upstream concessions — will partner with Perenco North Sinai Petroleum to explore the block. Perenco North Sinai Petroleum is a subsidiary of Valmore Holding, the firm formerly known as Egypt Kuwait Holding (EKH).

The block was awarded in June 2025 through EGAS’s 2024 international bid round. The planned work programme includes a 3D seismic survey and the drilling of one exploration well — standard early-stage commitments designed to establish whether a block holds commercial quantities of hydrocarbons.

Perenco, the UK-French independent behind the technical operation, is not a newcomer to the area. The company has operated on the North Sinai concession since 2014, giving it existing subsurface knowledge that could inform how quickly the Al-Fayrouz programme advances.

Egypt has been working to attract fresh upstream investment as it manages a period of tightening gas supply. The country shifted from being a net gas exporter to a net importer in recent years, driven by rising domestic consumption and declining output from mature fields. Expanding the exploration frontier — including into onshore areas such as North Sinai — forms part of the government’s strategy to reverse that trajectory.

The ratification of four agreements in a single parliamentary session reflects the pace at which Cairo is moving to convert bid-round awards into legally binding concessions, a step that allows operators to mobilise capital and begin field work.

For international operators and investors tracking African upstream opportunities, Egypt’s multi-basin licensing push — covering both established plays in the Mediterranean and frontier onshore acreage in Sinai — positions the country as one of the continent’s more active exploration markets heading into the second half of the decade.