Egypt to Restore Oil and Gas Production by 2025, Overcoming Financial Obstacles

On Thursday, Egyptian Prime Minister Mostafa Madbouly outlined an ambitious plan to restore the country’s oil and gas production to pre-existing levels by 2025, focusing on increased cooperation with international partners. This strategic initiative is a critical component of Egypt’s broader vision to strengthen its position as a regional hub for liquefied natural gas (LNG). The plan builds on recent large-scale discoveries, such as the Zohr gas field, which holds an estimated 30 trillion cubic feet of natural gas, making it one of the most significant finds in the Mediterranean region. Despite these promising developments, Egypt’s progress has been hindered by a severe shortage of foreign currency, which has resulted in mounting debts to international oil and gas companies operating within the country.

To mitigate these financial challenges, the Egyptian government has launched a program aimed at settling 20 percent of its outstanding arrears, with a structured timeline for clearing the remaining debt. This move is crucial for regaining the confidence of international investors and maintaining productive partnerships in the oil and gas sector. The financial strain has not only affected debt repayment but has also compelled the government to impose load shedding during the peak summer months to manage electricity demand. The shortage of natural gas and diesel imports needed to maintain stable power supplies has been a significant issue, with the country requiring an estimated USD 1.18 billion to import sufficient quantities and alleviate recurring power outages.

Natural gas is the backbone of Egypt’s energy infrastructure, accounting for the majority of the country’s electricity generation. According to recent data from the petroleum ministry, Egypt currently produces approximately 5.7 billion cubic feet of natural gas per day. However, this level of production falls short of the country’s growing energy demands, highlighting the need for increased investment and operational efficiency in the sector.

In response, the government signed agreements in July with two international companies, securing investments totaling USD 340 million. These investments are specifically aimed at enhancing oil and gas production in key areas such as the Mediterranean and the Gulf of Suez. The deals reflect Egypt’s determination to attract foreign capital and expertise to revitalize its energy industry and ensure sustainable growth.

By focusing on resolving its financial obligations and boosting production through strategic international partnerships, Egypt is positioning itself to overcome current challenges and achieve its long-term goal of becoming a leading energy hub in the region. The success of these efforts will be vital for the country’s economic stability and its ability to meet both domestic and regional energy needs in the coming years.