Egypt is set to restore its oil and gas production to previous levels by 2025, according to Prime Minister Mostafa Madbouly. During a recent press conference, Madbouly emphasized the country’s commitment to increasing energy output with the assistance of international partners, aiming to revitalize a sector crucial to Egypt’s economy.
Strategic Plans to Boost Production
Egypt, which had previously positioned itself as a regional hub for liquefied natural gas (LNG), has faced setbacks due to a foreign currency shortage that led to accumulating arrears. These financial challenges disrupted the country’s energy ambitions, despite major discoveries like the Zohr offshore gas field, which holds an estimated 30 trillion cubic feet of gas.
“There is a very clear plan to bring the volume of production of oil and natural gas with foreign partners back to previous levels, and to also increase it in the coming period,” Madbouly stated. This commitment is part of a broader strategy to stabilize and enhance the energy sector, which is vital for Egypt’s power generation and economic growth.
Efforts to Settle Debts and Attract Investments
In March 2024, the Egyptian government began addressing its financial obligations to foreign oil and gas companies operating within the country. A structured payment plan has been implemented, with 20% of the arrears already being cleared. The remaining debts are scheduled to be paid off over time, which is expected to rebuild confidence among international investors and partners.
To further bolster its energy sector, Egypt signed two significant agreements with international companies in July 2024. These deals, worth $340 million, are focused on increasing oil and gas production in the Mediterranean and the Gulf of Suez, key regions for Egypt’s energy industry.
Addressing Energy Challenges
Despite these efforts, Egypt has faced significant challenges in its energy sector, including frequent power outages. During the summer, the country had to resort to load-shedding to maintain its power grid, highlighting the urgent need for reliable energy sources. Egypt generates most of its electricity from natural gas, making the restoration of gas production crucial for preventing further disruptions.
As of July 2024, Egypt’s gas production stood at 5.7 billion cubic feet per day. The government’s ongoing initiatives, including foreign partnerships and investments, are expected to boost these figures and stabilize the energy supply.
Prime Minister Madbouly’s announcement signals a determined effort to overcome the hurdles facing Egypt’s oil and gas sector. By 2025, the country aims not only to return production to normal levels but also to strengthen its position as a key player in the global energy market.
Source: Reuters
