Egypt is setting its sights on restoring its oil and gas production to normal levels by 2025, with the assistance of international partners. The country’s Prime Minister, Mostafa Madbouly, announced this ambitious plan during a press conference, highlighting the government’s commitment to revitalizing the energy sector after recent challenges.
For years, Egypt had high hopes of becoming a regional hub for liquefied natural gas (LNG). The country’s optimism was fueled by a series of significant natural gas discoveries, most notably the Zohr offshore gas field, which holds an estimated 30 trillion cubic feet of gas. This discovery, along with others, positioned Egypt as a potential leader in the energy market.
However, these aspirations were derailed by a severe shortage of foreign currency, which led to the accumulation of substantial arrears to foreign companies operating in the oil and gas sector. This financial strain forced Egypt to scale back its production ambitions, delaying its goal of becoming a dominant player in the regional energy market.
Despite these setbacks, the Egyptian government remains determined to get its energy sector back on track. Prime Minister Madbouly emphasized that there is a clear and strategic plan in place to not only return oil and gas production to previous levels but also to increase output in the coming years. This plan will involve close collaboration with foreign partners, who are expected to play a crucial role in boosting the country’s production capacity.
The government has already taken steps to address the financial issues that have hindered its energy ambitions. In March, officials announced that they had begun paying off the debts owed to foreign companies working on petroleum projects in Egypt. This repayment plan covers 20% of the outstanding arrears, with a structured schedule in place to settle the remaining balance over time. This move is seen as a critical step in restoring confidence among international investors and partners, who are essential to Egypt’s plans for the energy sector.
Egypt’s reliance on natural gas for electricity generation has made the restoration of production levels even more urgent. During the summer, the country faced significant power shortages, which led to widespread load-shedding. To keep the power grid functioning, Egypt had to import approximately $1.18 billion worth of natural gas and mazut fuel oil. These imports were necessary to mitigate the impact of long-running electricity cuts that affected millions of Egyptians.
The need for reliable energy production was underscored in July when Egypt’s petroleum ministry reported that gas production had fallen to 5.7 billion cubic feet per day. This reduction in output highlighted the challenges facing the country’s energy sector and the importance of implementing the government’s plan to restore and enhance production levels.
To support these efforts, the Egyptian petroleum ministry has been actively seeking investments from international companies. In July, the ministry signed two agreements with foreign firms to invest a combined total of $340 million. These investments are aimed at boosting oil and gas production in key areas such as the Mediterranean and the Gulf of Suez. These agreements represent a significant vote of confidence in Egypt’s energy sector and are expected to play a pivotal role in achieving the government’s production goals.
The decision to invest in these regions is strategic, given their potential to yield substantial returns in terms of oil and gas output. The Mediterranean, in particular, has been a focus of exploration and development due to its promising reserves. Similarly, the Gulf of Suez remains a critical area for Egypt’s oil production efforts. By securing these investments, Egypt is taking concrete steps toward increasing its energy output and solidifying its position as a key player in the global energy market.
