Egypt signs deals to boost oil and gas output

Alamy via Reuters

• Deals with Shell and Petronas
• $222m investment in West Delta
• Further $120m in Gulf of Suez

Egypt has signed a series of investment agreements with international companies to increase oil and gas output as it strives to deal with a severe energy shortage.

Shell Egypt and Malaysia’s Petronas will invest $222 million to increase production rates and reserves in the Mediterranean’s West Delta region, according to Mena, the official press agency. 

The deal includes a commitment to drill three wells to produce gas and establish marine facilities, Mena said.

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In addition, Kuwait Foreign Petroleum Exploration Company and Cheiron Energy of Egypt will invest $120 million to increase oil production in the Geisum and Tawila West concessions in the Gulf of Suez, according to Mena.

The agreement includes expanding the concessions’ boundaries and drilling nine wells, five of which should be exploration wells.

Last week, Egypt’s Ministry of Petroleum and Mineral Resources announced an agreement with Eni, the Italian major, to accelerate oil and gas exploration activity.

• Egypt pays $1.3bn arrears to foreign oil and gas companies
• Israel to develop more natural gas exports
• Egypt seeks to treble foreign direct investment to $30bn

The company will use Egypt as a trading centre and will export natural gas produced from its fields in the Eastern Mediterranean from existing facilities.

Eni plans to invest about $160 million in the second half of 2024 to drill two new wells in the Zohr field, the country’s largest natural gas field, where production has been declining as a result of technological challenges and a lack of investment in enhanced production.

Egypt’s gas output has dropped to its lowest level in more than six years, as production from other fields is also declining. Total oil and gas output has dropped by 25 percent in the last three years.