KEY POINTS
- Egypt targets raising gas output from 4.1 bcf/d to 6.6 bcf/d by 2027 after settling billions in arrears to foreign oil companies.
- Prime Minister Madbouly says renewed investor confidence is driving fresh exploration and development plans.
- The push aims to restore Egypt’s role as an Eastern Mediterranean energy hub and cut reliance on costly LNG imports.
As the government works to regain investor confidence by aggressively repaying arrears owed to foreign energy partners, Egypt plans to increase natural gas production by more than half over the next two years, with a target of 6.6 billion cubic feet per day (bcf/d) by 2027.
According to Prime Minister Mostafa Madbouly, the endeavor represents a sea change for the nation’s energy industry, which has been dealing with dwindling production since 2022. Egypt, a former regional exporter, was forced to become a net importer as a result of the decline, filling the supply shortage with expensive LNG cargoes and more inflows from Israel.
Production is currently only 4.1 bcf/d, far less than the peak levels attained earlier in the decade. Authorities attribute the decline to a lack of hard currency, which made it impossible for the state to pay off debts owed to foreign oil firms and caused some operators to postpone or reduce their plans for drilling and development.
Debt repayment seen as catalyst for renewed exploration
Madbouly informed reporters that after a determined effort to settle past-due debts, foreign investors have re-entered Egypt’s upstream industry. “We have clear plans to return to previous production levels over the next two years, as foreign investors and partners have resumed investments as a result of our commitment to pay off the accumulated arrears,” he stated.
The government hopes to settle an additional $1.4 billion by the end of the year after paying $1 billion to foreign oil companies last month. The prime minister presented the repayment drive as essential to opening up new fields for exploration and development, especially in the Nile Delta and offshore Mediterranean.
Egypt’s aspirations are also in line with its overarching objective of establishing itself as an Eastern Mediterranean energy hub by utilizing the LNG export facilities currently in place at Idku and Damietta to supply markets in Europe and Asia. Increased domestic output could lessen the strain on the nation’s foreign reserves, increase export earnings, and lessen dependency on pricey LNG imports.
Although analysts caution that the plan depends on steady investment flows, timely project execution, and regional geopolitical stability, the production target presents a potential lifeline to Egypt’s balance of payments. The amount of gas available for export will also be influenced by the growing domestic demand for gas in industry and power generation.
Energy giants like Eni, BP, and Chevron, who own shares in Egypt’s most productive offshore blocks, have praised the government’s willingness to resolve the arrears issue. The nation is counting on a resurgence in drilling activity to halt its recent decline and restore its standing as a regional energy supplier, especially with new investment commitments on the table.
