Egypt launches incentives to boost oil, gas production

Egypt’s Minister of Petroleum and Mineral Resources, Karim Badawi, has unveiled a new set of incentives aimed at invigorating the sector.

This initiative, developed in collaboration with international partners involved in exploration, drilling, and production, is designed to improve the investment climate and significantly increase crude oil and natural gas output.

During a comprehensive meeting with key international petroleum production partners, Badawi emphasized the initiative’s importance in attracting further investments to the sector.

“By encouraging partners to invest more, the goal is to boost oil and gas production, as investments are crucial for supporting and increasing petroleum output,” he stated.

The minister outlined that the new incentives encompass mechanisms aimed at achieving production increases beyond current levels, alongside enhancing exploratory and developmental drilling activities.

Badawi noted that a portion of the revenue generated from increased production will be allocated to settle outstanding dues owed to partners, provide additional gas and oil to bridge the gap between domestic production and consumption, and help reduce the monthly import bill.

“This will free up more financial resources for both sides, enhancing investments in exploration and production activities, generating revenue for the state, and contributing to national security by ensuring a steady supply of locally produced petroleum,” he added.

Partners attending the meeting, including senior officials from the Ministry and the Egyptian General Petroleum Corporation (EGPC), praised the initiative as a critical step toward intensifying activities and increasing production. Samih Sabri, Senior Vice President of Wintershall Dea, remarked, “The initiative is well-timed and demonstrates a keen understanding of the challenges facing the petroleum industry, particularly in adding new reserves, boosting production, and maintaining output levels amid the natural decline of wells.”

Iman Hill, General Manager of Valeo Energy in Egypt, described the initiative as impressive and transparently presented, highlighting its significance in addressing industry challenges. She cautioned, however, that “the real challenge lies in execution, which must be overcome.”

Dalia El-Gabry, President of Shell Egypt, praised the initiative as bold, emphasizing that “success hinges on consistent application and continuity.”

She underscored the importance of productive cooperation, which is essential to reaping mutual benefits, especially given the trust-building potential the initiative offers.

Nicholas Katcharov, Regional Director of Greece’s Energean, echoed the sentiment, highlighting the necessity of continuity in implementation and describing the initiative as positive.

In a related development, the Ministry announced that the Egyptian Natural Gas Holding Company (EGAS) has launched a new global bid for 2024 to explore natural gas and crude oil in 12 sectors across the Mediterranean Sea and Nile Delta. This bid, which includes 10 offshore and two onshore sectors, is being conducted through Egypt Upstream Gateway (EUG).

Minister Badawi explained that this gas exploration bid supports Egypt’s broader strategy to intensify exploration activities in the Mediterranean, given the increasing interest in making discoveries and boosting natural gas production. “This has become a critical component of the local and global energy mix,” he noted.

He further highlighted that this marks the eighth bid launched using the latest digital tools via EUG, a platform initiated by the ministry in early 2021. The platform facilitates easy access to essential information and up-to-date technical data related to the bids, accelerating the evaluation of investment opportunities and the submission of proposals.

Moreover, Badawi announced the availability of additional investment opportunities in exploration and field development in open areas, accessible through the EUG. This portal allows interested companies to review all available geological and production data and submit their bids directly, enhancing transparency and efficiency in the bidding process and encouraging further investment in Egypt’s vital oil and gas sector.