The Oil Ministry is overhauling the way it does business with international oil companies with a USD 5 bn push to reverse a sharp decline in domestic natural gas production. The ministry is targeting an additional 1 bcf/d of production by the end of this year, part of a larger roadmap to bring output to 6.6 bcf/d by 2027 from the current 3.9 bcf/d.

Why this matters: Recognizing that the old investment model has stalled, the ministry is amending concession agreements, revising production-sharing mechanisms, and rolling out additional incentives to lure foreign energy players back to the rig.

The game plan: The increase will come through intensified exploration activity, new bid rounds, and higher investment from international oil and gas companies, alongside a parallel push to boost crude oil output amid ongoing energy supply disruptions and strained global supply chains, we’re told.

The ministry has already moved forward with revising several agreements to increase competitiveness and support its goal of achieving self-sufficiency by 2030, according to a government document reviewed by EnterpriseAM.

Key amendments include:

  • Updated terms between the Egyptian Natural Gas Holding Company and Wintershall Dea for exploration in the Nile Delta’s Disouq area;
  • An agreement between the Egyptian General Petroleum Corporation (EGPC) and a consortium including Cheiron, Offshore Shukheir Oil Company, and Sahara Oil & Gas for operations in North Zafarana in the Gulf of Suez;
  • EGPC will directly oversee exploration and development in Ras Badran and Gebel El Zeit in the Gulf of Suez;
  • Another agreement between EGPC, Cheiron, and Capricorn Energy for the Badr El Din integrated area in the Western Desert.

On the operational front, drilling vessel Valaris DS-12 has arrived in Egyptian waters to begin work on four new wells for BP and Arcius Energy.

REMEMBER- The Oil Ministry says it will settle its remaining USD 1.3 bn in arrears to international oil and gas companies by 30 June, fully clearing a backlog that reached USD 6.1 bn in mid-2024, as it aims to attract more foreign investment to boost local production.

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