QatarEnergy Partners with Shell to Boost Egypt’s Oil Production

QatarEnergy has entered into a significant partnership with Shell to acquire a 27% interest in the North Cleopatra offshore oil and gas block in Egypt. Shell will maintain a 36% stake in the block, with the agreement pending approval from the Egyptian government. This move is part of QatarEnergy’s broader strategy to expand its presence in Egypt, a country aiming to increase its oil and gas production rapidly.

Egypt has attracted the attention of several major oil companies, including Chevron, which is also involved in the North Cleopatra block. The partnership structure will see Chevron holding a 27% stake and Tharwa Petroleum Company owning 10%. QatarEnergy’s involvement in this block follows its acquisition of a 40% interest in two Exxon-led offshore blocks last year and a 23% stake in a Chevron-operated block that includes Woodside as a partner.

Egypt’s Oil and Gas Ambitions

Egypt’s government has set ambitious goals to become a significant player in the global oil and gas market. Despite having abundant resources, the country has faced challenges in developing them effectively. A notable shift occurred when Egypt transitioned from being a net exporter of liquefied natural gas (LNG) to a net importer by the end of 2024. This change was driven by a record number of LNG imports aimed at alleviating pressure on the national grid and industry during a period of energy shortages that led to rolling blackouts last summer.

The decline in domestic natural gas production, coupled with rising electricity demand, has compelled Egypt to focus on offshore resources. Since August 2024, the nation’s natural gas production has surged by over 200 million cubic feet per day, largely attributed to the introduction of new production wells at an offshore field operated by BP. Additionally, oil production has also seen an increase.

This uptick in production has had significant economic benefits for Egypt. The oil ministry reported that the rise in output has helped the country reduce its fuel import bill by $3.6 billion and settle $1 billion in outstanding payments owed to international partners. The combination of increased production and strategic partnerships positions Egypt to strengthen its role in the global energy landscape.

As QatarEnergy and Shell finalize their collaboration, the focus will remain on enhancing oil and gas production in Egypt, which is vital for the country’s economic stability and growth.