Shell Strengthens Egypt Ties With $120M Mediterranean Exploration Deal

Shell plc SHEL, along with some other companies, has entered into agreements with Egypt in order to strengthen the nation’s energy sector through international partnerships. Egypt entered into deals with various companies, valued at more than $340 million, to explore oil and gas in the Mediterranean and Nile Delta. The deals mark a strategic push for the nation to boost exploration and production at a time when domestic output is under pressure.

Shell is proud to reinforce its long-standing partnership with Egypt through a newly signed $120 million agreement with the Egyptian Natural Gas Holding Company (“EGAS”). This agreement covers the drilling of three wells in the Merneith offshore area of the Mediterranean, reflecting Shell’s commitment to advancing exploration activities that support Egypt’s growing energy needs.

Shell’s role in finalizing the agreement underscores its strong confidence in the Mediterranean basin’s potential. By signing this agreement, the company reinforced its commitment to expanding operations and strengthening its partnership with Egypt’s petroleum authorities.

Driving Exploration in the Mediterranean Basin

The Mediterranean basin continues to show significant potential for energy discoveries. By investing in this new project, Shell is leveraging its global expertise in offshore exploration and technology to help unlock untapped resources. This not only strengthens Egypt’s energy landscape but also aligns with the company’s strategy of delivering reliable, cleaner energy solutions for the region.

Egypt’s Partnership With Other Companies to Drive Exploration

The state-owned EGAS finalized four agreements covering the drilling of 10 wells. Alongside Shell’s commitment, notable participants include Eni S.p.A. E, which will invest $100 million to drill three wells in the East Port Said offshore block; Arcius Energy— a joint venture between BP p.l.c. BP (51%) and ADNOC’s XRG (49%), which pledged $109 million for operations in the North Damietta offshore area; and Russia’s Zarubezhneft, set to drill four wells in the Nile Delta’s North El-Khatatba block with a $14 million investment.

Addressing Domestic Energy Challenges

Egypt, once a regional energy exporter, now faces rising import dependence as output declines from aging fields and delays in fresh investments. Gas production in May dropped to 3,545 million cubic meters — down more than 40% compared to March 2021, according to Joint Organizations Data Initiative data. The new agreements are aimed at reversing this trend, ensuring greater energy security and reinforcing Egypt’s position as a regional hub.

Through this partnership, Shell, currently carrying a Zacks Rank #3 (Hold), aims to contribute meaningfully to the country’s efforts to boost local production and reduce reliance on imports. By working closely with the Petroleum Ministry and EGAS, the company is advancing Egypt’s broader vision of becoming a regional energy hub.

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Italy-based Eni SpA is among the leading integrated energy players in the world. Eni’s upstream operations include the exploitation and production of oil and natural gas resources.

BP is an integrated energy company that engages in the production of natural gas and integrated gas and power. BP also deals in gas trading, hydrogen and carbon capture, power trading and production of crude oil.

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