ExxonMobil Finds Major Gas Reserves in Egypt’s Mediterranean Waters

AFRICAN BUSINESS AND ECONOMYJanuary 20, 2025 at 3:18 PM UTC

TLDR

Exxon Mobil Corporation (XOM) has made a significant natural gas discovery in the Mediterranean Sea off Egypt’s northern coastline
The Nefertari-1 exploratory well, located in the North Marakia Block about five miles offshore, revealed gas-bearing reservoirs
Egypt's gas production has dwindled to its lowest levels since 2017, compelling the country to import LNG at levels unseen in six years

Exxon Mobil Corporation (XOM) has made a significant natural gas discovery in the Mediterranean Sea off Egypt’s northern coastline, marking a critical development for the energy sector and Egypt’s ambitions to restore its natural gas production. The Nefertari-1 exploratory well, located in the North Marakia Block about five miles offshore, revealed gas-bearing reservoirs. ExxonMobil will continue evaluating the discovery.

The Texas-based energy giant, which entered the block in 2019 and sold a 40% stake to QatarEnergy in 2022, drilled the well using Valaris Ltd.’s DS9 drillship, a state-of-the-art rig for deepwater exploration. This discovery adds to the region's growing importance, following significant finds in Israeli waters in the 2000s.

Egypt's gas production has dwindled to its lowest levels since 2017, compelling the country to import LNG at levels unseen in six years. However, a repayment plan aimed at resolving arrears and attracting foreign investment signals the government’s intent to reinvigorate the sector. ExxonMobil’s discovery could bolster Egypt’s goal of resuming LNG exports by 2027.

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Key Takeaways

ExxonMobil’s success underscores the Eastern Mediterranean’s role as a burgeoning gas exploration hub. The region’s proximity to energy-dependent markets in Europe and the Middle East enhances its strategic significance, despite challenges such as political instability and fluctuating global energy prices. For Egypt, the discovery comes at a pivotal time. The country faces declining production and financial strains that have deterred foreign investments. A renewed focus on deepwater exploration, bolstered by ExxonMobil’s success and collaborative partnerships like the QatarEnergy stake, could reinvigorate the sector. This aligns with Egypt’s efforts to position itself as a regional energy hub and achieve LNG export targets by 2027.

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