Minister Badawi explained that the report highlighted a
significant structural reset in Egypt’s petroleum sector, driven by
unprecedented government interventions, practical policy reforms, and the
alignment of conventional field development with energy transition goals.
Despite challenges linked to declining output from certain fields and the
natural decline in existing assets, the Egyptian government has become more
effective in stabilizing production levels, accelerating exploration for new
discoveries, launching numerous licensing rounds, revising the gas pricing
structure, and addressing delayed partner payments.
The report considered Egypt’s approach to managing the
petroleum sector as a model that other African producing countries could adopt
to retain investors in an increasingly competitive market.
The minister noted that regarding the restoration of
stability and production, Egypt had faced a gas supply crisis due to natural declines
in older fields. However, the situation has recently improved with the
government taking serious steps to settle outstanding payments through a series
of major installments. International oil companies’ debts gradually declined
during 2025 thanks to regular payments and the implementation of a financial
plan extending into early 2026, reflecting Egypt’s commitment to restoring
investor confidence, stabilizing the sector, and easing financial pressures on
operators.
The report added that APA Corporation, which holds the
largest onshore concession area in the country, achieved significant
quarter-on-quarter growth, far exceeding its 2024 average of 444 million cubic
feet per day, driven by a series of new gas wells that surpassed expectations.
APA also benefited from improvements to Egypt’s gas pricing system.
The report further highlighted Egypt’s efforts to restore
stability and production, noting that the country successfully stabilized
output at approximately 3.5 billion cubic meters per month during the last
quarter.
Regarding investment climate reforms, the report noted that
the government merged some concession areas to improve operational efficiency
and introduced a progressive gas pricing mechanism in response to operators’
demands, alongside direct dialogue with partners. This approach marked a
departure from the “take it or leave it” strategy common in many African
countries, reflecting a genuine partnership model.
The report also reviewed drilling and investment activities,
noting that improved contractual terms and measures taken led to momentum in
drilling operations and increased international company investments. Dana Gas
launched a $100 million drilling and development program targeting up to 11 new
wells. Egypt also signed new agreements with BP to expand Mediterranean
exploration, including plans to drill up to five offshore gas wells in
cooperation with the Egyptian Natural Gas Holding Company (EGAS). Additionally,
Eni announced $9 billion in investment plans, and Qatar Energy acquired a 27%
stake in the North Cleopatra offshore concession in partnership with Shell.
Minister Badawi highlighted that the report underscored
Egypt’s position as a global leader in licensing activity, ranking as the most
active country worldwide in 2025–2026 in terms of rounds conducted and planned,
and fifth globally in the number of bidding rounds offered, with 10 rounds
executed.
The report also detailed Egypt’s efforts in supporting
energy security through renewable energy, emphasizing that renewable expansion
helps balance gas consumption. Electricity generation from gas accounts for the
largest share of domestic demand, while the ambitious renewable energy plan
will contribute 46% of Egypt’s total energy sources. This will reduce natural
gas demand, decrease reliance on liquefied natural gas (LNG) imports,
strengthen national energy security, and create a future export margin.
In a related context, Minister Badawi presented an analysis
of crude oil and natural gas production from 2020/21 to 2029/30.
He also outlined Egypt’s strategy to become a regional gas
trading hub by increasing domestic production, securing additional inputs
through regasification units and port infrastructure, and implementing
connection projects to neighboring countries’ gas fields. He reviewed the
current status of regasification units and total available capacity, production
and supply targets, and ongoing efforts to continue exploration and discovery
activities to boost local crude oil and natural gas production, implement
self-sufficiency plans, and ensure sustainable and flexible natural gas
supplies through a diversified system combining domestic production and LNG
imports via regasification units.