Egypt Expands Exploration Activities in the Mediterranean with New Agreement with Chevron

- The Egyptian government signed a new agreement on Monday with the American company Chevron for the exploration of natural gas and crude oil and their exploitation in the Lotus offshore area in the Mediterranean Sea, with a minimum investment of $88 million. The agreement includes drilling two exploratory wells and reprocessing three-dimensional seismic data, in a step aimed at expanding the scope of exploration activities and increasing opportunities to access new energy resources.

Professor of Petroleum Engineering and Energy, Jamal Al-Qalyubi, stated that the agreement comes as part of Chevron's expansion in exploration activities in Egypt, after the company began its operations in the Egyptian market in 2023 through its partnership with the Italian company Eni, before expanding its exploration activities further. Al-Qalyubi explained that Chevron achieved an important precedent in the Mediterranean by participating in the discovery of the Narges field, noting that the development and enhancement operations for the field were delayed due to the delay in the payments owed to foreign partners, before the company returned since last March to carry out drilling operations for two developmental wells with the aim of integrating them into the production map.

Al-Qalyubi added in exclusive statements to Afaq News in Arabic that the Egyptian government's commitment to paying the dues of foreign partners and bringing them down to zero levels has enhanced confidence among foreign companies and encouraged them to inject new investments, especially since the Lotus agreement represents an extension of this trend and confirms the existence of trust in dealing with global companies. The Lotus offshore area is located about 200 kilometers from the Mediterranean coast, with water depths ranging between 2000 and 2800 meters, and the area has not previously witnessed the drilling of deep exploratory wells, making the agreement a new test for opportunities to access natural gas and crude oil resources in deep waters.

Al-Qalyubi pointed out that the Lotus area is one of the promising regions that contains reservoirs linked to the Nile Delta area and has geological layers that may hold significant economic quantities of gas, and thus Chevron obtaining exploration and research rights in the area opens the door to new discoveries. He emphasized that the agreement should not only be viewed as a large deal in terms of value but also as an indicator of the continued expansion of global companies in their operations in Egypt, noting that the petroleum sector accounts for about 16 to 20% of the volume of foreign investments in Egypt.

Chevron is one of the active global companies in the field of research and exploration in the Mediterranean Sea, currently investing in six maritime areas for gas and oil exploration, including Narges, North Dabaa, Lotus, Northwest Atoll, North Simian, in addition to North Cleopatra Marine, in which it partners with Shell. Chevron's operations in its Mediterranean concession areas have shown promising exploratory indicators, including the Narges gas discovery, while drilling operations at the Phylax well in the North Cleopatra Marine area have shown promising indicators for the presence of crude oil.

Al-Qalyoubi explained that the petroleum sector is succeeding in attracting new investments in research, exploration, and drilling activities, in addition to investments aimed at improving and developing discovered fields that have been delayed in entering the production map. He pointed out that the state's commitment to increasing natural gas production over the next two years, along with the interest in global companies' plans and facilitating obstacles for them, has contributed to encouraging companies to increase their investments in the Egyptian market. The fiscal year 2025/2026 witnessed intensified research and exploration activities, with 8 new agreements signed for oil and gas exploration with a minimum investment of $377 million, and non-refundable signing bonuses worth $74 million, in addition to 9 contracts for field development and achieving 63 new discoveries, including 48 oil discoveries and 15 gas discoveries.

In the gas sector, the Egyptian Natural Gas Holding Company (EGAS) signed 5 new agreements for gas exploration during the same fiscal year with investments of $240 million, which include drilling 14 exploratory wells. The research efforts resulted in 9 new discoveries, including 8 gas discoveries and one oil discovery, with additions estimated at about 2.8 trillion cubic feet of gas. For his part, Dr. Atiyah Atiyah, Dean of the Faculty of Energy Engineering at the British University in Egypt, stated in exclusive remarks to Afaq News in Arabic that increasing investments in the Mediterranean and Red Seas is essential to secure Egypt's energy needs, emphasizing the necessity of diversifying energy sources and not relying solely on natural gas, while accelerating oil and gas production processes and providing incentives for investors, especially companies that bear the risks of drilling in deep waters.

Atteya explained that the expansion of exploratory drilling represents an important step in identifying new areas that can be developed and included in the production map, noting that the plan to drill about 101 exploratory wells contributes to expanding the search for new petroleum resources, especially in the Mediterranean and Red Seas. The Lotus agreement comes as part of the Ministry of Petroleum's plan to expand the exploration and research map and offer more investment opportunities in the Mediterranean, Western Desert, Delta, Gulf of Suez, Sinai, and southern Egypt, alongside ongoing and planned seismic survey programs, aimed at providing the latest and most accurate data on geological formations and identifying promising areas.

Atteya pointed out the importance of expanding 4D seismic survey operations, which are among the most globally recognized methods in exploration, reducing drilling risks and accurately identifying areas with petroleum resources, calling for the implementation of high-resolution seismic surveys in various regions of Egypt.