Egypt is launching a new incentive framework to stimulate investment in horizontal drilling and hydraulic fracturing as part of a broader plan to raise domestic oil and gas production, Petroleum and Mineral Resources Minister Karim Badawi said.

Speaking during a meeting with heads of upstream operating companies and international oilfield services, drilling and technology firms, Badawi said the Egyptian General Petroleum Corporation (EGPC) is finalising a new incentive model aimed at encouraging partners to deploy advanced production enhancement technologies.

He said the initiative forms part of a five-year strategy to maximise hydrocarbon resources in onshore and offshore areas through increased investment, improved reservoir management and accelerated exploration activity.

Badawi added that the ministry has also completed updated contractual structures for services, technology and drilling companies to support the rollout of horizontal drilling and hydraulic fracturing, with the aim of reducing costs, shortening execution timelines and streamlining approvals.

The minister described horizontal drilling and fracking as important tools for lifting production, citing successful international examples where such technologies have increased recovery rates and output levels.

Zero arrears by June 

Badawi said Egypt will clear all outstanding arrears owed to foreign partners by the end of June, while maintaining regular monthly payments, describing the move as a key step in improving the investment climate and restoring confidence among operators.

The unpaid dues, which has been reduced from $6.5 billion in June 2024 to $1.2 billion at present, had weighed on investment flows and contributed to declining oil and gas production.

Badawi also reiterated the ministry’s commitment to its plan to drill 101 exploration wells during 2026, underlining positive results from the offshore West Denise well, where reserves are estimated at around 2 trillion cubic feet of gas.

(Writing by Majda Muhsen; Editing by Anoop Menon)

(anoop.menon@lseg.com)

Subscribe to our Projects' PULSE newsletter that brings you trustworthy news, updates and insights on project activities, developments, and partnerships across sectors in the Middle East and Africa.