Will ExxonMobil’s Gas Discovery Help Egypt’s Energy Crisis?

ExxonMobil has announced a major natural gas discovery off the coast of Egypt, located in the Mediterranean Sea.

This discovery, made in the North Marakia Block, could be a turning point for Egypt’s energy sector, helping to revive its natural gas production and boosting its ambitions to become a key energy hub in the region.

The gas was found at the Nefertari-1 exploratory well, located about five miles from shore, and contains gas-bearing reservoirs.

ExxonMobil is continuing to evaluate the discovery to determine the full extent of the find. The well was drilled using the Valaris DS-9 drillship, a state-of-the-art rig designed for deepwater exploration.

This discovery is especially important for Egypt, which has been facing declining gas production, reaching its lowest levels since 2017.

As a result, the country has had to import liquefied natural gas (LNG) at levels not seen in six years.

ExxonMobil’s new find could help Egypt achieve its goal of resuming LNG exports by 2027, a target that has become more urgent as production has slowed.

In addition to the recent discovery, ExxonMobil is planning to drill two new exploratory wells in the West Mediterranean area starting in December 2024.

These wells will be drilled in the Cairo and Misri concessions and are expected to be completed by the first quarter of 2026, with an investment of $240 million.

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ExxonMobil has also begun drilling in another natural gas prospect called Electra, located west of Cyprus, in partnership with QatarEnergy.

Egypt is looking to ramp up its hydrocarbon exploration, with plans to sign 15 new energy agreements by the end of 2025.

ExxonMobil, which has been a part of Egypt’s energy sector for more than 115 years, secured more than 1.7 million acres for exploration off Egypt’s coast in 2019.

The company has also partnered with QatarEnergy in the North Marakia block, with QatarEnergy purchasing 40% of ExxonMobil’s stake in 2022.

These partnerships reflect the growing appeal of Egypt’s energy sector to international investors.

The success of this discovery highlights the Eastern Mediterranean’s potential as a gas exploration hub, offering access to energy-dependent markets in Europe and the Middle East.

Despite challenges such as political instability and fluctuating energy prices, the region’s proximity to these markets makes it strategically important.

For Egypt, this discovery comes at a critical time. The country is grappling with declining production and financial issues that have made it harder to attract foreign investments.

A renewed focus on deepwater exploration, fueled by ExxonMobil’s success and its partnerships, could help turn things around and strengthen Egypt’s position as a regional energy hub.

The hope is that these efforts will help Egypt reach its LNG export targets by 2027, supporting economic growth and development in the country.