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Egypt plans to restore full gas output in 2025

By Eva Levesque
Workers at Egypt's Zohr gas facility. It is unclear if the drop in output is due to technical issues or lack of investment Eni
Workers at Egypt's Zohr gas facility. It is unclear if the drop in output is due to technical issues or lack of investment
  • Egypt became net gas importer
  • Zohr gas field output still low
  • Debts owed to foreign oil companies

Egypt plans to restore its natural gas production to normal levels by June 2025, the prime minister has said. 

The country has become a net importer of fuel amid declining domestic output and increasing energy demand. 

Falling output from Zohr – Egypt’s largest natural gas field developed by Eni of Italy – led to daily blackouts and forced Cairo to recommence LNG exports for the first time in years. The country has bought more than 50 LNG cargoes this year.

Becoming a net gas importer was a turnaround for the North African country, which had positioned itself as an LNG supplier to Europe.

Prime minister Mostafa Madbouly said on Thursday that the drop in local production is due to arrears with foreign production companies.

The outstanding payments slow investment in exploration and production, exacerbating the gas shortages.

Madbouly did not specify the exact amount of the debt, but analysts estimate it at around $6 billion.

In June the government cleared $1.3 billion of arrears to foreign oil and gas companies operating in the country, about 25 percent of the backlog.

The payment followed a $57 billion influx of capital from the UAE for the Ras El-Hekma development on the Mediterranean coast, and from institutions including the IMF.

In March the Egyptian government cleared about $1.5 billion, equivalent to 20 percent of the arrears.

Zohr accounted for around 40 percent of the country’s total gas production, but the field currently produces less than 20 billion cubic metres of gas. It is unclear if the drop in output is due to technical issues or lack of investment.

Eni told AGBI in July that it  was “confident on the recovery of outstanding dues, in line with the discussion with the authority”.

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