Egypt has signed four major oil and gas exploration agreements worth over $340 million with international companies to search for new reserves in the Mediterranean Sea and Nile Delta. These deals, announced by the Petroleum Ministry on August 30, 2025, involve drilling 10 wells and aim to increase production as the country faces falling output from older fields.
Details of the New Agreements
The state-owned Egyptian Natural Gas Holding Company led the signings. Each deal targets specific areas to find fresh oil and gas supplies.
Shell secured the first agreement for $120 million. It covers three wells in the Merneith offshore block in the Mediterranean.
Eni from Italy signed a $100 million deal. This one focuses on three wells in the East Port Said offshore area.
Arcius Energy, a joint venture between BP and ADNOC’s investment arm, got a $109 million contract. It involves work in the North Damietta offshore region.
Russia’s Zarubezhneft rounded out the deals with a $14 million agreement. This targets four wells in the onshore North Khatatba block in the Nile Delta.
These pacts come at a key time for Egypt, which wants to reverse a drop in natural gas production. Recent data shows output fell to about 3.5 billion cubic meters in May 2025, down over 40 percent from peaks in early 2021.
Key Companies and Their Roles
Shell brings its global expertise in deep-water drilling to the table. The company has a long history in Egypt, including past finds in the Mediterranean.
Eni has been active in the region for years. It made a huge discovery at the Zohr field in 2015, which once boosted Egypt’s exports.
Arcius Energy combines strengths from BP and ADNOC. This partnership formed recently to tackle high-potential areas like North Damietta.
Zarubezhneft adds Russian know-how to onshore efforts in the Nile Delta. The company focuses on efficient drilling in proven but underexplored spots.
Together, these firms plan to invest heavily and use advanced tech to speed up exploration.
Experts say such collaborations help Egypt tap into hard-to-reach reserves. For instance, offshore Mediterranean blocks often hold large gas pockets, based on seismic surveys from recent years.
Impact on Egypt’s Energy Sector
These deals could help Egypt meet growing local demand for energy. The country shifted from exporting gas to importing it in recent years due to rising needs from power plants and industries.
Boosting production might cut import costs and create jobs. Exploration activities often lead to thousands of positions in drilling, logistics, and support services.
The ministry noted that two new wells in the West Delta area started producing in late July 2025. They add about 60 million cubic feet of gas per day, showing quick wins from similar investments.
Here is a summary of the deals:
| Company | Investment Amount | Area | Number of Wells |
|---|---|---|---|
| Shell | $120 million | Merneith offshore (Mediterranean) | 3 |
| Eni | $100 million | East Port Said offshore | 3 |
| Arcius Energy | $109 million | North Damietta offshore | Not specified |
| Zarubezhneft | $14 million | North Khatatba onshore (Nile Delta) | 4 |
This table highlights how the investments spread across offshore and onshore sites.
Background on Production Challenges
Egypt’s gas output has declined since hitting highs around 2020. Aging fields in the Nile Delta and Mediterranean have not kept up with demand, which grew due to population increases and industrial expansion.
In 2024, the government launched bids for new blocks to attract investors. This led to deals like the one with Eni and BP in July 2025 for another Mediterranean well.
Falling production forced Egypt to import more liquefied natural gas. Costs rose sharply in 2025 amid global price hikes from supply issues in Europe and Asia.
Officials aim to return to self-sufficiency. Discoveries like Zohr once made Egypt a key player, but new finds are needed to sustain that.
Future Prospects and Broader Context
Looking ahead, these agreements might lead to major discoveries. The Mediterranean holds untapped potential, with estimates of trillions of cubic feet of gas based on regional studies.
Success here could strengthen Egypt’s role in the East Mediterranean Gas Forum. This group includes countries like Israel and Cyprus, working on shared resources.
Recent events, such as a new gas find by Eni in early 2025 with 3.5 trillion cubic feet reserves, show promise. Such breakthroughs encourage more investment.
Egypt also pushes green energy, but oil and gas remain vital for now. Balancing fossil fuels with renewables is key to long-term stability.
If these drills hit paydirt, Egypt could boost exports again by 2027, easing economic pressures.
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