Shell plans new gas drilling in Egypt's West Nile Delta

Shell Egypt and its partners plan to drill 3 new exploratory wells in the West Nile Delta Deep Marine concession in the Mediterranean Sea later this year.

The project is expected to provide an additional 200 million cubic feet of gas per day at a cost of over $200 million. Drilling is scheduled to start in late 2023 after regulatory approvals are obtained, with production slated for 2024. 

Rashid and Bardis Petroleum - a joint venture between the Egyptian General Petroleum Corporation and Shell -  will operate the new wells. Petronas has a  50% non-operating stake along with Shell as the concession operator.

At its peak in the early 2000s, the West Nile Delta concession produced over 2 billion cubic feet of gas per day. However, production gradually declined in subsequent years to around 300 million cubic feet per day last year.

Shell estimates a supply gap of 491 billion cubic feet of gas in Egypt between 2023 and 2025, attributing the shortfall to falling output from the West Nile Delta concession.

Meanwhile, the Egyptian government aims to attract $8 billion in investments to the oil and gas sector in FY2023/24 according to Oil Minister Tarek El Molla. The investments will fund exploration, development and operating expenses.

Egypt's natural gas production is expected to reach 6 trillion cubic feet by 2025, more than double its 2021 output of 2.45 trillion cubic feet, according to the U.S. Energy Information Administration.

So Shell's new drilling plans could help boost Egypt's gas production and supply to meet rising domestic demand and export targets.

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