BP signs preliminary deal with Egypt’s EGAS to drill five Mediterranean gas wells

BP has signed a preliminary agreement with the Egyptian Natural Gas Holding Company (EGAS) to drill five new deepwater gas wells in the Mediterranean Sea, Egypt’s Petroleum Ministry said on Monday.

The memorandum of understanding with state-owned EGAS comes as Egypt seeks to boost exploration and production.

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Egypt, once a regional exporter, has increasingly turned to imports to meet rising domestic gas demand as output declines from aging fields and investment lags in new ones.

Gas production in May was 3,545 million cubic meters, down more than 40 percent from March 2021, according to the Joint Organizations Data Initiative, which provides data on the global energy market.

Drilling of the five wells, at depths of 300 to 1,500 meters, is expected to start next year, the ministry said. Any new production would feed existing production facilities in the West Nile Delta, BP said in a statement. It has operated in Egypt for over six decades.

BP is currently reviewing how best to spend its $13–$15 billion annual investment budget, given new projects in Azerbaijan, Iraq, Libya, and Abu Dhabi and exploration successes in Namibia and Brazil, the latter being hailed as BP’s biggest discovery in a quarter century.

On August 30, Egypt’s Petroleum Ministry announced the signing of four deals with international firms worth more than $340 million to explore for oil and gas in the Mediterranean and Nile Delta.

The firms included Shell, Italy’s Eni, and Arcius Energy, a joint venture 51 percent owned by BP and 49 percent by ADNOC’s investment arm XRG.

Read more: Egypt signs $340 mln oil, gas deals with global firms