At a time when the Egyptian government is intensifying announcements of new natural gas and oil discoveries, presenting them as evidence of a recovery in the energy sector and strengthened energy security, economic policies are moving along a parallel track that dismantles the energy subsidy system and gradually shifts its burdens onto consumers, under the banner of “structural reform,” portrayed as an unavoidable choice.
Between these two tracks, the state is expanding its investments in exploration and import activities and signing long-term contracts worth billions of dollars, while simultaneously retreating from its historical commitment to treating energy as a social and economic right of citizens. Instead, energy is increasingly handled as a commodity subject to market logic and global pricing, rather than a basic service guaranteed as a public right.
Recently, Egypt’s energy sector has witnessed announcements of a series of new oil and natural gas discoveries, concentrated in the Western Desert, the Nile Delta, and the Eastern Desert, as part of official efforts to boost domestic production and reduce reliance on imports, amid a growing gap between supply and demand and rising import costs.
Between November 2025 and January 2026, the Ministry of Petroleum and Mineral Resources announced a series of discoveries across several exploratory wells, adding approximately 47 million cubic feet of natural gas per day, alongside around 4,300 barrels of crude oil and condensates.
In January 2026, the sector recorded five new discoveries, including three by Khalda Petroleum Company, with combined production reaching about 2,550 barrels of oil and condensates per day, in addition to 29 million cubic feet of natural gas. A gas discovery was also announced in the Nile Delta within the Abu Madi reservoir through a joint project between Desouk Petroleum Company and Harbour Energy.
In the Western Desert, four additional discoveries were recorded, adding around 4,500 barrels of oil per day and 2.6 million cubic feet of gas. These included a discovery by Tharwa Petroleum at the EAS Z-3 well in East Abu Sennan, producing 1,500 barrels of oil per day; two discoveries by Khalda at the Sultan S-1X RC and Alex NW-1X wells, with combined production exceeding 1,500 barrels of oil and 1.7 million cubic feet of gas; and a discovery by Borg El Arab Petroleum at the AS Z-2X well in the Abu Sennan area.
Earlier, in November 2025, Badr El Din Petroleum Company (BAPETCO), a joint venture between the Egyptian General Petroleum Corporation and Shell, announced a new gas discovery in the Badr-15 area in the Western Desert, with production capacity estimated at around 16 million cubic feet of gas per day and 750 barrels of condensates daily, adding an estimated 15 billion cubic feet to recoverable reserves. In December 2025, the Italian company Eni announced the completion of drilling at the Zohr 6 well in the Mediterranean, adding around 60 million cubic feet of gas per day to Zohr field production, a field that since its discovery in 2015 had been viewed as the cornerstone of Egypt’s gas self-sufficiency strategy, before subsequent years revealed challenges related to declining output and rising domestic consumption.
December also saw announcements of other discoveries in the Nile Delta and the Eastern Desert, collectively adding more than 5,000 barrels of oil per day and about 42 million cubic feet of gas. This reflects a recurring pattern of medium-sized discoveries that support production without delivering a structural leap in the energy balance.
During the 2024/2025 fiscal year, data issued by the Ministry of Petroleum indicate the registration of 75 new oil and gas discoveries, contributing approximately 1.1 billion cubic meters of gas and 200,000 barrels of oil per day to production. Despite the intrinsic significance of these figures, their real implications remain contingent on the state’s ability to translate these discoveries into sustainable production, within a sector that has experienced a relative decline in output in recent years.
In parallel, Egypt plans to drill more than 100 exploratory wells in 2026, including 14 wells in the Mediterranean targeting reserves estimated at around 12 trillion cubic feet of gas. The government has also announced plans to drill 480 exploratory wells over five years, with investments estimated at around $5.7 billion, involving major international companies, including Eni with about $8 billion, BP with around $5 billion, and Aker BP with approximately $3.7 billion.
However, these discoveries and investments come at a time when Egypt continues to import liquefied natural gas to bridge the gap between domestic production and rising demand, particularly in the electricity sector. This raises questions about whether recent discoveries can bring about a genuine transformation in the energy balance, or whether they remain gains whose impact is deferred.
Cypriot Gas… Egypt’s Winning Card Against Netanyahu’s Threats?
Securing Supplies or Deepening Dependence on External Sources?
Alongside the announcement of new discoveries, the period from October 2025 to January 2026 saw the Egyptian government sign a number of natural gas import agreements, amid a decline in domestic production to around 4.2 billion cubic feet per day. These moves come as part of official efforts to boost local output and compensate for the downturn the sector has experienced since 2022, with a target of reaching 6.6 billion cubic feet per day by 2027 to meet domestic consumption, which currently exceeds 6.2 billion cubic feet per day, equivalent to about 2.2 trillion cubic feet annually. The electricity sector accounts for the largest share of this consumption, at approximately 58–60%, according to 2023/2024 data.
Egypt’s liquefied natural gas (LNG) imports reached about 9.01 million metric tons in 2025, most of them from the United States, accounting for more than 90%. Imports are expected to rise to 11.14 million tons in 2026, an increase estimated at around 26.3%.
In February of last year, Egypt signed a $3 billion agreement with Shell and TotalEnergies to supply around 60 LNG cargoes during 2025. The agreement was later expanded to include up to 160 cargoes over 2025 and 2026, to secure electricity supplies.
In August, Tel Aviv announced what it described as “the largest gas deal in its history” with Cairo, valued at $35 billion, to export around 130 billion cubic meters of natural gas until 2040. The deal, signed between Israeli companies, most notably NewMed Energy, a partner in the giant Leviathan field, and the Egyptian side, doubles the volume of exports that began in 2019, when they stood at 60 billion cubic meters. This makes Egypt the largest destination for Israeli gas in the region.
In October, Egypt signed two commercial agreements with Cyprus to transport gas from the Cypriot Cronos field to Egypt for liquefaction at the Idku and Damietta plants, prior to re-export. In January of this year, Egypt also signed a memorandum of understanding with Qatar to enhance cooperation in the sale and import of liquefied natural gas, including the supply of up to 24 LNG cargoes to the ports of Ain Sokhna and Damietta during the summer of 2026, from June to September. The agreement aims to secure summer energy demand for electricity generation, particularly as Egypt’s LNG imports rose by 188% to 7.8 million tons in the first 11 months of 2025.
For his part, Hossam Arafat, Professor of Petroleum and Mining at the Faculty of Engineering at Cairo University and former head of the Petroleum Materials Division at the Federation of Chambers of Commerce, believes that the recent gas and oil discoveries announced by Egypt cannot be treated as an actual addition to production at the present time. He stresses that what has been announced remains within the framework of discoveries and has not yet entered the production phase.
He explains to Zawia3 that talk of expected reserves is insufficient to build stable energy policies, arguing that the key benchmark must remain proven reserves and tangible additions to production on the ground. He adds that the intensity of media statements about discoveries does not necessarily translate into immediate improvements in energy conditions. He points out that previous experience with the Zohr field requires a greater degree of caution, after long-term self-sufficiency was promoted in 2015, while subsequent years revealed a clear inability to meet demand, culminating in electricity outages during 2023 and 2024.
“The crisis was not purely technical,” he says. “It was also linked to financial and administrative factors, including the accumulation of arrears owed to foreign companies operating in the petroleum sector, which negatively affected rates of field development and expansion.”
In January, Egyptian Prime Minister Mostafa Madbouly announced that Egypt had paid around $5 billion of its outstanding dues to foreign partners in the oil and gas sectors, and that it aims to reduce the remaining arrears to $1.2 billion by June 2026. Arafat views this as an implicit acknowledgment of previous imbalances that contributed to declining production, stressing that foreign partners are unlikely to inject new investments in the absence of guaranteed financial returns.
Regarding the flow of Israeli gas to Egypt, the professor of petroleum and mining notes that the matter is governed by complex international balances. He points in particular to U.S. interests, especially the stake held by Chevron in the Leviathan field, which represents a major pressure factor in ensuring the continuation of contractual commitments. Ultimately, however, he says that the Egyptian citizen is less concerned with these political entanglements than with ensuring the availability of electricity and fuel as a basic right.
As for the agreement to import Qatari gas in the summer of 2026, he considers it part of a strategy to diversify energy sources and avoid reliance on a single supplier amid volatile global markets and geopolitical tensions. He explains that the stability of energy supplies is a fundamental prerequisite for attracting industrial investments, particularly in energy-intensive sectors such as fertilizers, whose exports depend heavily on the regular flow of gas.
On cooperation with Cyprus and Greece, Arafat explains that Egypt’s role focuses on providing liquefaction and regasification services, benefiting from advanced infrastructure that many Eastern Mediterranean countries lack. He emphasizes that this role is primarily commercial, as Egypt leases its facilities and provides technical services in return for commissions, whether for Cypriot gas or that of other countries, as part of maximizing returns from existing investments.
In this context, the discoveries and agreements together reflect a complex landscape for managing Egypt’s energy file, where considerations of production, imports, regional politics, and financial pressures intersect. This opens the door to fundamental questions about the sustainability of these policies, their economic and social costs, and the limits of their ability to achieve genuine energy security.
Arafat ultimately concludes that Egypt’s current energy management relies on a mix of domestic production and external imports, aimed first at securing internal needs and second at maintaining Egypt’s regional role. He stresses that assessing the success of these policies must always be based on actual outcomes on the ground, rather than statements or future promises.
A Regional Role Amid Domestic Scarcity
At the beginning of this year, Egypt signed two memoranda of understanding with Syria to supply natural gas and petroleum products to support electricity generation, using floating regasification units. The agreement came about a month after Egypt signed a memorandum of understanding with Lebanon to supply around 2 billion cubic feet of gas per month to the Deir Ammar power plant via the joint Arab Gas Pipeline, which starts in El Arish in North Sinai and extends to the Levant and onward to Europe, and has yet to enter full operation.
These agreements come at a time when the government emphasizes its pursuit of a regional role in the energy sector, despite challenges linked to declining domestic production, rising demand, and growing reliance on imports. Hossam Arafat suggests that Egypt’s gas export file carries political dimensions as much as economic ones, explaining that through these understandings Egypt seeks to consolidate its role as a regional energy hub in the Eastern Mediterranean.
He explains that lower domestic electricity demand during the winter, compared to the summer season when pressure on the grid intensifies, provides some leeway to direct limited quantities of gas to neighboring countries. He notes that the volumes allocated to Syria and Lebanon remain limited and do not exceed around 50 million cubic feet per day, and are used within political and commercial arrangements without posing a significant burden on the domestic market.
In the same context, Hafez El Salmawy, Professor of Energy Engineering at the Faculty of Engineering at Zagazig University and former Chief Executive of the Electricity Utility and Consumer Protection Regulatory Agency, explains that Egypt does not export surplus domestic gas production. Rather, it imports gas on behalf of Syria and Lebanon and then pumps it through the Arab Gas Pipeline, given their lack of the infrastructure needed to import gas directly. He notes that this arrangement allows for mutual benefit: Syria and Lebanon receive relatively preferential prices, while Egypt benefits from maximizing the utilization of its gas regasification facilities, particularly during periods when domestic imports decline outside the summer peak.
El Salmawy considers that Egypt is on its way to becoming a transit hub for energy supplies, leveraging its modern infrastructure to serve neighboring countries in return for economic returns, while at the same time securing its own domestic needs.
Regarding the import of Qatari gas cargoes, he sees this step as part of securing supplies and diversifying sources. He tells Zawia3 that the aim is not long-term dependence, but rather the provision of multiple alternatives that reduce the risks of supply disruptions. By contrast, he explains that gas coming from the United States is cheaper but takes longer to arrive, while Qatari gas benefits from shorter distances and faster delivery, providing an additional margin of security, in addition to the possibility of payment facilities, although no confirmed information is available on this point.
He believes that sound energy policies rest on two main pillars: first, securing supplies through diversification of sources; and second, obtaining competitive prices. He argues that the recent gas and oil discoveries announced by Egypt are not expected to bring about a major shift in the balance of production and consumption, and that their impact will remain limited in the short term. Egypt’s current gas production stands at around 4.1 billion cubic feet per day and may rise with new discoveries to between 4.3 and 4.4 billion cubic feet, while daily consumption ranges between 6 and 6.2 billion cubic feet, meaning a persistent gap estimated at roughly one-third of demand.
“This gap is currently covered through two main tracks,” he says. “The first is importing gas via pipelines from Israel, and the second is importing liquefied natural gas. Egypt’s continued signing of gas import agreements is therefore necessary to meet domestic market needs, given the limited expected increases in production.”
The former head of the electricity regulator notes that extending the gas import agreement with Israel until 2040, instead of 2032, with increased volumes, comes within this context, alongside other agreements, including linking Cypriot gas fields to the Egyptian network. He explains that the Cypriot Cronos field, located near the Zohr field, is expected to begin production by 2028, allowing for the import of around 400 million cubic feet per day, followed by the Aphrodite field by 2031, which could add around 700 million cubic feet per day.
El Salmawy explains that these developments will lead, in the medium term, to greater reliance on pipeline gas coming from Israel and Cyprus, reducing the need to import liquefied natural gas, which is the most expensive option. He adds that the existence of advanced LNG infrastructure gives Egypt a degree of flexibility and security, as an alternative in the event of any disruption to pipeline gas supplies.
By contrast, Hassan Nasr, Head of the General Division for Petroleum Materials at the General Federation of Egyptian Chambers of Commerce, asserts that a number of gas fields in the Desouk gas area, along with new discoveries in the Central Delta region, have already entered production in recent months. This, he says, has contributed to a state of relative stability in gas supplies during the current period, estimating gas production at around 1.4 billion cubic meters per day.
Regarding the impact of these discoveries on the supply-demand gap, Nasr explains that they mainly contribute to reducing the import bill, limiting dollar outflows, and boosting foreign reserves. However, they do not directly affect domestic energy prices, which remain linked to global prices. He notes that Egypt has not yet reached full global pricing levels.
Despite the recent discoveries, Egypt continues to sign gas import agreements. Nasr believes this falls within the framework of risk management and securing supplies, and of achieving a balance between domestic production and external import sources in anticipation of any technical emergencies or sudden fluctuations. He points to the stability of energy supplies during the past summer.
He tells Zawia3: “Global energy prices have declined by between 2% and 3% recently, due to lower consumption in some markets, which has encouraged imports as a precautionary option that ensures supply stability without placing additional burdens on the economy.”
Regarding gas import agreements from Israel’s Leviathan field, Nasr notes that the extension of the agreement until 2040 has not yet been implemented on the ground. What is currently underway, he explains, is limited to previously contracted volumes, while new volumes have not entered into force due to recurring technical faults and maintenance and infrastructure development works. He also links this to regional developments, particularly the war on Gaza.
“The agreements signed with Qatar come within the framework of securing additional supply alternatives. They have not yet been activated, but remain available options in the event of a shortage or disruption in supplies. This arrangement gives the state greater flexibility in managing the gas file and helps reduce reliance on spot imports, contributing to the rational use of foreign currency,” he adds.
As for cooperation with Greece and Cyprus, Nasr explains that Egypt’s role focuses on providing gas liquefaction services through its LNG plants, followed by re-export to European markets in return for commercial commissions, reinforcing Egypt’s position as a regional hub for energy trade in the Eastern Mediterranean.
Nasr believes that the memoranda of understanding related to gas exports to Syria and Lebanon carry both political and economic dimensions. He explains that through these arrangements, Egypt seeks to play its regional role and support Arab countries facing acute energy crises, particularly Lebanon. He adds that these arrangements are presented within a mix of support and commercial cooperation, strengthening regional relations while serving Egypt’s economic interests at the same time.
Energy Policies and Economic Justice
The price of a household gas cylinder with a capacity of 12.5 kilograms stands at 225 pounds ($4.77), following an increase of 25 pounds ($0.53) approved in October 2025. This cylinder is the main cooking source for millions of households, especially in rural and informal areas that remain outside the natural gas network. By contrast, the price of the commercial cylinder with a capacity of 25 kilograms has remained at 450 pounds ($9.55), and it is used in restaurants, commercial establishments, and service activities.
The increase came as part of a package of decisions announced by the Automatic Pricing Committee for Petroleum Products as part of its periodic review of fuel prices. Although butane cylinders were included in this increase, the government emphasized at the time that the decision takes the social dimension into account and does not aim to fully remove subsidies in a single step, in an attempt to reassure public opinion, especially as inflation rose and living costs increased, and given that butane is a vital commodity that wide segments of the population cannot do without.
The pricing system for gas cylinders in Egypt still relies on partial subsidies, as the state bears part of the cost of production or import, particularly to cover the needs of low income groups. By contrast, household natural gas delivered through the network is subject to a progressive consumption tier system that is relatively less costly for households connected to the grid. The price per cubic meter in the first tier, from 0 to 30 cubic meters, is 4 pounds ($0.08), and it rises to 5 pounds ($0.11) in the second tier, from 31 to 60 cubic meters, with gradual increases in higher tiers.
Energy policies in Egypt cannot be read in isolation from their broader economic context. The import bill for gas and petroleum products, which reached about $20 billion in 2025, places growing pressure on the trade balance and the state budget, and is used as one of the main justifications for raising electricity and fuel prices and reducing subsidies. This raises fundamental questions about who bears the cost of the state’s energy choices: does the public treasury and the companies benefiting from gas contracts bear it, or is it gradually transferred to households, especially poorer groups, through successive increases in energy prices and related services? And do Egypt’s energy policies affect economic justice and social rights?
Mohamed Ramadan, a researcher in economic and social justice at the Egyptian Initiative, argues that talk of Egypt having a surplus of natural gas at the present time does not accurately reflect reality. He explains that the country still imports gas to cover the needs of the local market, whether through Israeli gas or through importing other cargoes, and that this gas is then liquefied and exported or re exported through regional pipelines, which means that the gas exported in this case is not purely Egyptian gas.
He tells Zawia3 that the question of the “right to energy” has become absent from government policies since the start of understandings with the International Monetary Fund, amid repeated increases in energy prices, whether electricity or fuel. He notes that the forms of energy most harmed by these policies are those directed to the poor, foremost among them butane cylinders, whose prices have risen by about tenfold in recent years.
He says: “Linking the announcement of new gas discoveries to citizens obtaining their right to affordable energy is an unreal link, because the energy price liberalization policies in place in Egypt prevent these discoveries from being reflected directly in citizens’ lives, and current pricing policies prevent any positive social impact from them, while achieving energy justice requires different pricing and social protection policies.”
He adds: “Current energy policies do not sufficiently guarantee the right to safe and affordable energy. Despite expansion in solar energy projects, they remain confined to the large scale framework, without real empowerment of small and medium sized companies. The energy file also lacks any genuine societal debate, and the absence of public objections, whether parliamentary or popular, to energy import and export policies reflects weak oversight.”
He points out that the government has raised energy prices in recent years without redirecting the savings resulting from subsidy cuts to social protection programs as had been announced. He stresses that achieving sustainable energy justice requires linking subsidy reduction policies to increased social spending on education, health, and cash support, in a way that reduces poverty and marginalization instead of deepening them.
He also criticizes the intensive promotion of gas discoveries without disclosing their cost or contractual terms, pointing to a complete lack of transparency in this file and the failure to publish contracts or details of foreign partners’ shares. He described this as unusual globally, as such contracts are published in other countries without issue.
He notes that long term gas import contracts primarily affect the trade balance, as increased imports raise demand for the dollar, putting pressure on the local currency’s value and contributing to higher inflation and commodity prices. While they do not directly affect the state budget, given that the budget of the Egyptian General Petroleum Corporation lies outside it, they still constitute an indirect economic burden.
He emphasizes that the economic feasibility of importing gas varies depending on the purpose of its use. Importing it for re export differs from importing it as a production input for local industries such as fertilizers or petrochemicals, which generate higher added value. He argues that the fundamental question is not “Do we import or not?” but “Why do we import and how do we use this gas?”
A reading of Egypt’s energy landscape, with its announced discoveries, long term import agreements, and intertwined regional roles, reveals a clear gap between official discourse on “energy security” and citizens’ living reality. While energy policy is managed through the logic of risk management, maximizing commercial returns, and reinforcing geopolitical positioning, the social cost of these choices remains unevenly distributed and is gradually placed on households, especially poorer groups, through raising fuel and electricity prices and reducing subsidies, without sufficient social protection policies or genuine transparency in resource management.
Within this landscape, the fundamental question remains open: for whom are Egypt’s energy policies managed? And is their success measured by the size of deals and regional roles, or by their ability to guarantee citizens’ right to safe, stable, and affordable energy as one of the foundations of economic and social justice? The answer to this question does not hinge on discovery figures or the scale of investments as much as it requires a comprehensive reconsideration of the philosophy governing energy management, balancing market requirements with societal rights, and subjecting this vital file to public oversight and a genuine societal debate that goes beyond statements to accountability for results on the ground.
