ABSTRACT
The Khalda Concession was owned by a subsidiary, Phoenix Resources of Egypt. The concession granted exploration rights in the Western Desert of Egypt, about 100 miles east of Libya. The farm-out concept was broached with other producers in Egypt. The terms of the farm-out agreement met virtually all of Texas International, Inc. (TEI) critical needs and more. Phoenix of Egypt would take no further risks; Conoco Egypt was the risk taker. The most common form of concession agreement between international oil and gas companies and host-country governments is the joint venture. Long-term prospects did little to ameliorate TEI’s immediate troubles. Following the sale of Eloi Bay in March 1987, the Khalda Concession represented 85 percent of TEI’s proven reserves and was virtually its only source of revenues. Conoco was the largest holder of concession rights in Egypt and more than any other company should have understood the concession’s terms.
