Egypt: Eni drills new wells in the Zohr field

The Egyptian government is stepping up its efforts to reverse the decline in natural gas production, with an ambitious plan to bring production back to pre-crisis levels by June 2025. At the heart of this strategy is the drilling of two new development wells on the Zohr gas field in the eastern Mediterranean.

Discovered in 2015 by Italian giant Eni, Zohr is the largest gas field ever found in the eastern Mediterranean. By 2019, it was producing a record 3.2 billion cubic feet per day, accounting for 40% of the country's gas production. However, technical challenges, including the natural loss of reservoir pressure, and delays in payments to foreign partners have led to a significant drop in production.

By 2024, Zohr's production had fallen to 1.9 billion cubic feet per day, more than 40% below its peak. This situation contributed to a major energy crisis marked by power cuts, forcing the government to review its energy policy.

To rectify the situation, Egypt has launched a drilling campaign costing $160 million. The Saipem 10000 drillship is due to arrive at the Zohr site at the end of January 2025 to begin drilling the first of two secondary routes. The aim of this work is to stabilise and increase gas production, with a view to meeting the country's energy needs and reducing its dependence on LNG imports.

According to Egypt's new oil minister, Karim Badawi, the government is determined to bring domestic production back to pre-crisis levels. Badawi, former director of SLB New Energy for the Middle East and North Africa, also stressed the importance of restoring the confidence of foreign investors, in particular by settling outstanding debts.

The Zohr field is operated by a joint venture between the national company EGAS and foreign partners. Eni holds a 30% stake, while Russia's Rosneft, the UK's BP and the UAE's Mubadala Energy hold 30%, 10% and 10% respectively.

In September 2024, Egypt began honouring its debts to its foreign partners, notably by paying Eni $600 million, a crucial gesture to restore confidence and allow investment in Zohr to continue.

Egypt aspires to become a focal point for gas in the Eastern Mediterranean thanks to its existing liquefaction and regasification infrastructure. However, falling domestic production and increased reliance on LNG imports have slowed this ambition.

In an effort to boost its ambitions, in December the country signed an agreement with New Fortress Energy to lease a floating storage and regasification unit (FSRU) capable of regasifying up to 750 million cubic feet per day. This unit will be operational at Ain Sokhna from summer 2025, boosting the country's gas import capacity.

With new drilling on Zohr and initiatives to improve gas infrastructure, Egypt hopes to overcome the current challenges and once again become a key player in the regional gas industry. The success of this strategy will depend on the effective implementation of current projects and cooperation with international partners.

By restoring production at Zohr, the government aims not only to resolve the domestic energy crisis, but also to consolidate its position in the Mediterranean and global gas markets.