ExxonMobil is exploring opportunities to enter Egypt’s upstream oil and gas sector, after the 2015 discovery of a huge gas deposit in the Mediterranean offshore Egypt, industry sources and Egyptian officials have told Reuters.

Currently, Exxon only operates in Egypt’s downstream, with more than 350 service stations, over 20 Mobil 1 Centers, and exports of lubricants and products to more than 25 countries in Africa, the Middle East, Europe, and the Far East.

Exxon officials have held talks with the Egyptian petroleum ministry over potential investments in oil and gas production, Egypt’s Petroleum Minister Tarek El Molla told Reuters on the sidelines of OPEC and partners’ meeting in Vienna last week.

According to industry sources who spoke to Reuters, Exxon is studying potentially entering the offshore of the eastern Mediterranean and the Red Sea.

In the Mediterranean offshore Egypt, Eni discovered in July 2015 the huge Zohr field that the Italian oil major says has a total potential of 850 billion cubic meters of gas in place and is the largest natural gas field ever discovered in the Mediterranean. Eni has divested minority stakes in the Zohr field to BP and to Russia’s Rosneft, and plans to start production at Zohr by the end of this year.

According to a source familiar with Exxon’s plans, “After Zohr there was a reassessment of the portfolio profitability in Egypt” by Exxon, the source told Reuters and added that the U.S. supermajor was targeting “tier one assets” with significant potential.

More industry sources said that Exxon could be studying possible operations in the Red Sea, where Egypt plans to tender oil and gas blocks for exploration.

By Tsvetana Paraskova for Oilprice.com