KEY POINTS
- Egypt is drilling three new wells at the Zohr gas field this fiscal year.
- Output from Zohr has fallen to 1.9 bcf/d, far below its 2019 peak.
- Eni resumed drilling after arrears to foreign partners curbed investment.
In an effort to restart production at a location that was once touted as a game-changer for the nation’s energy balance, Egypt is drilling three new wells at its flagship Zohr gas field in the Mediterranean.
According to the petroleum ministry, the wells are part of the work program for the current fiscal year, and Zohr-6, another well, has already increased national output by roughly 65 million cubic feet per day (mmcfd). Cairo’s attempt to bolster supplies in the face of growing domestic demand and commitments to liquefied natural gas exporters is reflected in the action.
Output still trails peak despite new drilling push
Egypt’s gas ambitions have been anchored by Zohr, which was discovered by Eni SpA in 2015 and developed at record speed. When the field came online in late 2017, it helped transform the North African country from an importer to an exporter, with an estimated 30 trillion cubic feet of reserves.
However, recent years have seen a slowdown in production. Due to delayed drilling and reduced investment due to arrears to international partners, output dropped to 1.9 billion cubic feet per day in early 2024, significantly below the field’s 2019 peak.
Drilling was only resumed in February by Italian major Eni, which runs Zohr through its Petrobel venture with the Egyptian government-owned General Petroleum Corp.
The renewed activity suggests a slow but deliberate recovery, though analysts caution that restoring peak flows will require consistent cash flow to foreign oil companies and improvements in Egypt’s strained energy balance.
By exporting to Europe and its neighbors via pipelines and LNG cargoes, Egypt has established itself as a gas hub for the Eastern Mediterranean. However, limited supplies and frequent blackouts have compelled authorities to balance the demand for electricity at home against exports.
The goal of the most recent drilling project is to preserve Cairo’s position in the regional gas trade while increasing local availability. However, maintaining both domestic supply and export commitments may prove challenging as arrears persist and domestic consumption rises.
Zohr continues to be a key component of Egypt’s strategy. As Cairo works to maintain its aspirations to become a gas hub, investors, European buyers, and other regional producers are keeping a close eye on the field’s growth and development.
