Not long ago, Egypt’s gas industry was in crisis. Production fell by a third in the three years to 2015. A top ten LNG exporter in the prior decade, the country had, by then, become a top ten importer.
Nearly all available gas had to be diverted by the government to serve the domestic market. As a result, export revenue dried up, the cost of gas imports soared, and there was insufficient cash to pay contract commitments to E&P investors.
Arrears ballooned to US$7 billion, and producers were becoming uneasy. Today, happily, things are very different, and investment is flooding back in. What happened to turn things around? Stephen Fullerton, Upstream Research Analyst, identifies two key factors.
First, Egypt is one of the lucky countries geologically, endowed with enormous resource potential which has fostered an active industry for 150 years.
Attention has shifted this century from traditional onshore heartlands and the Gulf of Suez, to the deeper-water gas discoveries in the Nile Delta and Mediterranean.