Egypt announces new Western Desert oil discovery

• 7,165 bpd and 23m cubic feet of gas found
• New exploration incentives expected
• Offshore gas production had fallen

Egypt’s Khalda Petroleum Company has made a new oil discovery in the Kalabsha Development Area of the Western Desert, as the country aims to overcome power shortages and stalling production levels.

The discovery, 270 feet below the ground, will produce 7,165 barrels of oil per day with 23 million cubic feet of associated gas, according to a statement from the Egyptian oil ministry.

The announcement was made the same day that the Egyptian Natural Gas Holding Company launched a new international bid round for the exploration and exploitation of natural gas and crude oil in 12 blocks in the Mediterranean and Nile Delta.

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The bidding includes 10 offshore blocks and two onshore blocks and will be open until February 25 2025. It is the eighth bidding round hosted on the online Egypt Upstream Gateway, which the oil ministry launched in 2021.

On Tuesday Al Mal newspaper, speaking to unnamed government sources, also reported that new incentives are in the pipeline to encourage oil exploration, drilling, production and development.

Egypt’s aspirations to become a regional energy hub have been stalled recently due to a gas shortage exacerbated by its falling offshore gas production.

In 2023, the country produced around 59 billion cubic metres of gas, a 11.5 percent drop from the previous year.

Last week prime minister Mostafa Madbouly said in a press conference that Egypt intends to return to “normal” gas production levels by 2025 with assistance from international partners.

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Egypt announced in July it would oversee the drilling of 110 exploratory wells for gas and oil throughout the country. This involves a total investment of $1.2 billion for exploration drilling in the current financial year.

Elsewhere, Egypt’s government has said it aims to increase its renewable energy capacity before next year. Madbouly has previously stated that the country is targeting an increase of 4 GW before next summer. 

On Tuesday, local press cited unnamed government officials who said that 7,150 MW of new renewable energy projects are currently being developed.