Egypt's government is optimistic about a significant increase in foreign investment in its oil and gas sector. A government official stated that investments from foreign oil and gas companies are expected to rise to $2.3 billion in the 2026-2027 fiscal year. This represents a 91.6% increase from the previous year. The investments will focus on drilling and developing wells in both marine and onshore concession areas.
The planned investments aim to boost Egypt's natural gas production. The country intends to drill 51 wells and increase its gas and condensate output. In the previous fiscal year, Egypt successfully drilled 42 wells. For the current fiscal year, Egypt aims to add approximately 1.34 billion cubic feet per day to its gas production from new wells. This represents a 34% increase.
Foreign companies are also expected to contribute to Egypt's oil production. They plan to add around 14,455 barrels of condensates per day from new wells. This accounts for about 2.6% of Egypt's current total crude and condensate production, which stands at 550,000 barrels per day. Egypt aims to raise its crude and condensate production to 626,000 barrels per day by the end of the next fiscal year.
Egypt's current natural gas production stands at approximately 3.8 billion cubic feet per day. However, the country's demand is significantly higher, reaching around 6.2 billion cubic feet per day. During the summer months, demand surges to about 7.5 billion cubic feet per day. The government is working to bridge the gap between production and consumption.
The expected increase in foreign investment is linked to the resolution of outstanding debts owed to foreign companies. Egypt's government has cleared its debt to these companies, which stood at $6.1 billion in July 2024. The clearance of these debts has enabled foreign companies to boost their spending on drilling and development activities.
Egypt has introduced incentives to attract foreign investment in the oil and gas sector. These incentives include allowing foreign companies to export a portion of their new production to help settle their debts. Additionally, Egypt has raised the purchase price for the share of foreign partners in newly discovered gas.
Egypt is also securing new sources of gas from the region. In April, the country agreed to purchase the entire production of Cyprus's Aphrodite gas field once it becomes operational. This move is part of Egypt's strategy to ensure long-term supplies and meet its growing domestic demand.
Key points
- Egypt expects foreign investment in oil and gas to reach $2.3 billion in 2026-2027.
- The country aims to drill 51 wells and increase its gas and condensate output.
- Egypt's natural gas production currently stands at approximately 3.8 billion cubic feet per day.
