Several multinational oil and gas companies, including Chevron, have pulled out of Egypt’s Red Sea concession blocks after unsuccessful exploration efforts, according to the Egyptian petroleum ministry.
In 2019, Egypt granted exploration licenses in the Red Sea to Chevron, Shell, and Abu Dhabi’s Mubadala Investment Company through an international bidding round as part of its strategy to become a regional energy hub.
“These companies have invested millions within the agreed timelines,” said ministry spokesperson Moataz Atef during a press briefing.
He added that one unnamed company had spent $34 million on a contract that originally required a $10 million investment, but the exploration yielded no discoveries.
Chevron confirmed that it has given up its 45% operated stake in Red Sea Block 1, located in the northern part of the Red Sea.
“Chevron is still committed to Egypt’s energy sector and will continue its exploration activities in the Mediterranean,” said company spokesperson Sally Jones on Friday.
Chevron had partnered on the Red Sea block with Australia’s Woodside Energy. Shell, meanwhile, operated Block 3 alongside Woodside and QatarEnergy.
Atef declined to name the other companies that exited the Red Sea concessions. Shell chose not to comment, while Mubadala, Woodside, and QatarEnergy did not immediately respond.
Despite the exits, the ministry remains optimistic about the Red Sea’s potential, Atef emphasized.
He noted that both Chevron and Shell have already applied for new exploration blocks in the Mediterranean, showing continued interest in Egypt’s oil and gas industry.
Jones also said Chevron currently holds stakes in three other exploration blocks in Egypt, operating two of them in the Mediterranean.
According to data from the Joint Organizations Data Initiative, Egypt produced 4.6 billion cubic meters of gas in January 2024. However, output declined to 3.6 billion cubic meters by January 2025, despite government efforts to boost production.
To ensure a stable electricity supply this summer, Atef assured the public that Egypt would deploy three to four floating storage and regasification units.
He added that the government had secured LNG shipments and developed an emergency plan to manage any unexpected spikes in demand.
Last summer, Egypt faced energy shortages caused by extreme cooling needs. To cope, the country implemented power cuts and spent roughly $1.18 billion on energy imports.
source:www.oedigital.com