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Home Sector Energy Egypt launches major natural gas initiative to drill 11 wells yielding 160 billion cubic feet

Egypt launches major natural gas initiative to drill 11 wells yielding 160 billion cubic feet

Minister Karim Badawi oversaw drilling operations at Begonia-2 in the New Mansoura concession area
Egypt launches major natural gas initiative to drill 11 wells yielding 160 billion cubic feet
The Ministry of Petroleum and Mineral Resources actively boosts natural gas output across regions to ensure a reliable national gas supply. (Photo Credit: Egypt's Ministry of Petroleum and Mineral Resources)

The Ministry of Petroleum and Mineral Resources in Egypt has initiated a comprehensive program aimed at drilling 11 new wells, which are projected to yield approximately 160 billion cubic feet of natural gas. This undertaking will also contribute an additional daily output of around 100 million cubic feet of gas and 2,000 barrels of condensates.

Minister of Petroleum and Mineral Resources Karim Badawi conducted a field visit to Dakahleya to oversee the ongoing drilling operations at the Begonia-2 well, situated in the New Mansoura concession area. The well is managed by Wasco Petroleum in collaboration with Dana Gas.

This visit aligns with the ministry’s primary strategic pillar, which emphasizes enhancing domestic production to satisfy local demand for petroleum products and natural gas. The strategy involves accelerating exploration and development activities across new concession areas.

The Begonia-2 well holds particular importance as it functions as an appraisal well for the extensive Begonia development area. Its objective is to evaluate natural gas reserves within the Abu Madi formation in the Miocene layer. Preliminary estimates indicate that the reservoir may contain up to 9 billion cubic feet of gas, which will contribute to future development initiatives and provide a qualitative boost to local production.

egypt gas
(Photo Credit: Egypt’s Ministry of Petroleum and Mineral Resources)

Boosting natural gas output

The Ministry of Petroleum is actively working to elevate natural gas output across various geographic regions—including the onshore Nile Delta—to guarantee a reliable supply to the national gas grid. Additionally, the ministry continues to meticulously monitor the execution of exploration and production programs through its affiliated companies, aiming to maximize returns from available resources. These efforts are undertaken in partnership with both local and international collaborators and are bolstered by newly introduced incentive packages designed to stimulate domestic oil and gas production.

These initiatives play a crucial role in fortifying the national energy system and furthering broader economic development objectives.

In July 2024, Egypt’s Ministry of Petroleum and Mineral Resources signed two agreements with Shell and Cheiron Energy, valued at $342 million, to amplify oil and natural gas production. These agreements were established following Minister Karim Badawi’s discussions with the presidents of Shell and Cheiron Energy.

egypt gas
(Photo Credit: Egypt’s Ministry of Petroleum and Mineral Resources)

Read more: Egypt to launch two new oil wells this June, adding 5,400 barrels daily

Boosting oil production in Gulf of Suez

In an effort to enhance investments in oil and natural gas production, Egypt engaged in a series of discussions with international oil companies operating within the country last year. The Egyptian General Petroleum Corporation (EGPC), Shell Egypt, and Malaysia’s Petronas signed the first agreement to invest $222 million in the West Delta area aimed at increasing natural gas production. This investment supported the 10th phase of the project, designed to improve production rates and recoverable reserves of natural gas.

The companies successfully drilled three gas production wells and set up offshore facilities to bring these wells into operation. The projected capacity of the wells was anticipated to reach 150 to 200 million cubic feet before the close of 2024.

The EGPC, Cheiron Energy, and the Kuwait Foreign Petroleum Exploration Company (KUFPEC) finalized the second agreement to invest approximately $120 million in boosting Egypt’s oil production and expanding exploration in the Geisum and Tawila West area in the Gulf of Suez. Under this agreement, Cheiron Energy and KUFPEC committed to drilling nine wells, including three exploration wells. This initiative sought to elevate exploration efforts and production from about 21,000 to 26,000 barrels of crude oil per day.

Officials from Cheiron Energy confirmed intentions to increase the number of rigs in their work areas to achieve the mutual goal of enhancing production and reserves. They also indicated that they were investigating opportunities to boost natural gas production from the West Burullus offshore field development project.

egypt gas
(Photo Credit: Egypt’s Ministry of Petroleum and Mineral Resources)

Establishing an LNG hub

In August 2024, Egypt announced plans to reinstate oil and gas production to pre-pandemic levels starting in 2025, aided by international partners, as stated by Prime Minister Mostafa Madbouly. The North African country had aimed to establish itself as a regional hub for liquefied natural gas (LNG), following a series of recent discoveries, including the vast Zohr offshore gas field, which is estimated to hold 30 trillion cubic feet of gas.

However, these ambitions faced challenges due to a shortage of foreign currency, resulting in the accumulation of arrears owed to foreign companies involved in petroleum projects. Madbouly articulated a clear strategy to restore oil and natural gas production levels in partnership with foreign entities to their prior benchmarks, while also seeking to further increase output in the near future.

In March, the government announced that it had begun to settle dues owed to foreign companies operating in the country’s petroleum sector. A payment plan for 20 percent of the arrears has been initiated, with the remaining balance to be resolved according to a scheduled plan. According to the state news agency, Egypt’s petroleum ministry reported gas production at 5.7 billion cubic feet per day in July. Additionally, the ministry signed two agreements with international companies in July, collectively investing $340 million to enhance oil and gas production in the Mediterranean and Gulf of Suez regions.

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