Egypt - Minister of Petroleum and Mineral Resources Karim Badawi said the state has made significant progress in addressing one of the energy sector’s most pressing challenges—the accumulation of arrears owed to foreign partners—which had weighed on investment flows and contributed to declining oil and gas production.

He explained that Abdel Fattah Al-Sisi had prioritised resolving the issue, noting that consistent monthly payments, alongside a structured arrears reduction plan, have brought total partner dues down from $6.1bn at the end of June 2024 to around $1.3bn. The government is now targeting full settlement and zero arrears by the end of June, effectively closing the file.

The remarks came during a meeting organised by the American Chamber of Commerce in Egypt, chaired by Omar Mehanna, with the participation of the chamber’s Petroleum and Gas Committee, headed by Amr Abu Eita, Chairperson of ExxonMobil Egypt, and attended by senior executives from major international energy companies operating in Egypt.

Participants included Dalia El-Gabry, Chair of Shell Egypt; Wael Shahin, Regional Vice President of BP in Egypt; Greg McDaniel, Senior Vice President of International Assets at Apache Corporation and General Manager of its Egypt operations; and Channa Kurukula Surya, Country Manager of Chevron Egypt.

Badawi said this progress reflects coordinated government efforts led by the Prime Minister, in cooperation with the Ministry of Finance, based on two key pillars: settling partner dues while stimulating investment, and diversifying the energy mix.

He added that Egypt aims to raise the share of renewable energy to 42% of the energy mix by 2030, alongside expanding electricity generation from nuclear power, which would help reduce reliance on natural gas for power generation—currently accounting for around 60% of domestic consumption.

The minister noted that recently introduced incentives have helped revive investment in exploration and production following a slowdown linked to accumulated arrears. Measures have focused on lowering production costs per barrel to improve project economics and attract partner investment, including enhanced contractual terms, extended agreements, and new opportunities near existing production areas.

He pointed to Apache Corporation’s success in increasing gas output in the Western Desert as a key outcome of these incentives.

On regional cooperation, Badawi highlighted the importance of partnership with Cyprus to transport Cypriot gas to Egypt and utilise its infrastructure, whether for re-export or for use in petrochemicals and fertiliser industries.

He stressed that advanced technologies are central to unlocking new exploration opportunities, citing the implementation of modern seismic survey projects in the southern Western Desert and the Red Sea, as well as the adoption of horizontal drilling and hydraulic fracturing techniques.

He also noted that the government is developing new contractual and incentive frameworks to attract investment in frontier areas, particularly in the Western Mediterranean, the Red Sea, and the southern Western Desert.

Badawi reaffirmed the government’s commitment to securing gas supplies for the electricity and industrial sectors, noting that regasification vessels and LNG import infrastructure are in place to ensure stable supplies during peak demand or potential regional disruptions, adding that the coming summer is “secure”.

For her part, Dalia El-Gabry said Shell Egypt has been operating in Egypt for more than 110 years, with recent investments focused on supporting gas production, particularly through the West Nile Delta project. She noted the successful addition of two new production phases and preparations to launch Phase 12.

She added that the company has conducted, for the first time in Egypt, a four-dimensional seismic survey in the area, revealing promising opportunities. She also noted that the rig “Stena IceMAX”, operated by Shell, is the first to arrive in Egypt in 2026 and is currently drilling the “West Mina” well, which is expected to come onstream before year-end.

El-Gabry said Egypt’s transformation into a regional energy hub is becoming a reality, highlighting efforts to maximise utilisation of the Idku LNG plant and increase export shipments in recent periods.

Wael Shahin said BP is intensifying its activities in Egypt, particularly in the Mediterranean, and is set to begin drilling its first gas well within days as part of its 2026 programme. He noted that regular settlement of dues and investment incentives have accelerated project timelines.

He added that this momentum contributed to a recent discovery announced by Eni in partnership with BP, with plans to bring it into production as soon as possible. He also highlighted BP’s interest in Red Sea exploration, where it has recently signed an agreement.

Greg McDaniel said Apache Corporation has invested in Egypt for more than 30 years, with around $5bn deployed over the past five years. He highlighted the importance of an agreement signed with the Ministry of Petroleum 18 months ago, which has enhanced the attractiveness of gas investment in the Western Desert.

Channa Kurukula Surya said Chevron Egypt has been operating in Egypt since 2020 in gas exploration, currently investing in three areas and negotiating entry into three additional ones. He added that drilling at the Nargis field in the Mediterranean is set to begin within weeks in partnership with Eni.

He also underscored the importance of cooperation with Egypt to maximise the value of Cyprus’s Aphrodite field, given Egypt’s infrastructure and its role as a regional hub for gas trading and transportation.

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