Egypt is pushing forward with ambitious oil and gas development plans, announcing new auctions and major investments to boost its fossil fuel industry. A $7 billion petrochemical complex and other key projects aim to revitalize the sector, though the country must regain investor trust following a challenging financial year.
As one of Africa’s top fossil fuel producers, Egypt ranks second in liquid fuel production among non-OPEC nations, behind Angola. It was also the continent’s second-largest natural gas producer in 2022, following Algeria. The country’s gas sector has expanded over the past decade, largely due to offshore projects like the Zohr gas field. However, future production is expected to decline as Zohr matures and recent exploration efforts have fallen short.
New Petrochemical Complex to Drive Growth
In February, Egypt signed a framework agreement with the U.K.-based Shard Capital and Saudi Arabia’s Al-Qahtani Group to construct a $7 billion petrochemical facility in New Alamein City. The project will be managed by a consortium including members from Shard Capital, Al-Qahtani Group, and the UAE’s Royal Strategic Partners. Once operational, the complex is expected to produce 3.1 million tonnes of eight different petrochemical products annually.
Egypt’s Petroleum Minister, Karim Badawi, emphasized that the facility will incorporate advanced technologies to minimize environmental impact. He highlighted the project’s role in maximizing the value of Egypt’s natural resources while boosting export capacity. The investment is also expected to strengthen ties between Egypt, Gulf nations, and the U.K.
New Exploration Opportunities Announced
In March, Egypt’s Ministry of Petroleum and Mineral Resources launched a new investment round to attract companies to its oil and gas sector. The ministry is offering seven undeveloped fields in the Mediterranean and six exploration blocks in the Gulf of Suez and the Western Desert. Companies can submit bids through the Egypt Upstream Gateway (EUG) until May 4, 2025.
This follows the recent closure of bidding for 13 exploration areas and mature fields, with multiple offers under evaluation. These projects are expected to bring in over $700 million in investments.
The government has structured the new auction to improve efficiency and investment returns. The seven undeveloped fields are grouped into two clusters: the Aten, Merit, and Rahmat fields in one, and the Notus, Salamat, Satis, and Salmon fields in another. This approach aims to lower production costs and streamline operations.
Strengthening Energy Security
Egypt is working to expand its oil and gas industry to enhance energy security. Untapped natural gas reserves in the Mediterranean could help Egypt reduce its reliance on imports as energy demand continues to grow. President Abdel-Fattah El-Sisi envisions Egypt as a key production and re-export hub for global markets.
Alongside fossil fuel investments, Egypt has expressed interest in renewable energy. Ahead of hosting the 2022 COP27 Climate Conference, the government pledged to generate 42 percent of its energy from renewables by 2035, later moving the target forward to 2030. In June 2024, then-Electricity Minister Mohamed Shaker announced a more ambitious goal of 58 percent renewable energy by 2040.
However, in October 2024, the government revised its target, lowering it to 40 percent. During the announcement, Petroleum Minister Badawi reaffirmed the role of natural gas in Egypt’s energy mix for the foreseeable future. At the Mediterranean Energy Conference, he urged increased exploration and investment to secure new gas discoveries in the region.
Rebuilding Investor Trust
Egypt’s government is focused on regaining investor confidence following the 2024 energy crisis. A sharp decline in domestic gas production forced the country to import billions of dollars’ worth of gas to meet demand last summer. As supplies dwindled and electricity demand surged, Egypt implemented load-shedding measures to maintain grid stability. The crisis was exacerbated by a currency devaluation of 60 percent between March and September 2024 and an estimated $6 billion debt for gas and fuel imports.
To address these challenges, President Sisi and Minister Badawi are prioritizing new investments. They aim to attract foreign companies through upcoming oil and gas auctions while reassuring existing investors about Egypt’s long-term stability in the energy sector. By expanding production and strengthening partnerships, Egypt hopes to secure its position as a regional energy leader.
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