Egypt signs a $1bn oil and gas exploration deal with Shell and Malaysia’s Petronas

As Egypt continues its move to become an oil and gas major in Africa, the country, on Saturday signed a deep-water oil and gas exploration deal with Royal Dutch Shell and Petronas for 8 wells in the country’s West Nile Delta. According to the petroleum ministry, the deal is worth around $1 billion.

Major discoveries in recent years, such as Zohr, which holds an estimated 30 trillion cubic feet of gas, have encouraged Egypt to push towards becoming a regional hub for the trade of liquefied natural gas (LNG). Thus, the country has been holding talks with different oil companies on exploration at different sites.

Last month, Egypt signed three deals with Egyptian Natural Gas Holding Company (EGAS), Tharwa Petroleum, Italy’s Eni, Croatian multinational oil company INA d.d., Egyptian General Petroleum Corporation and BP worth $139.2 million, for the exploration of oil and natural gas in the Mediterranean Sea, the Western Desert, and the Nile Delta.

While the Egyptian government speeds up exploratory actions, it is also paying close attention to its non-oil exports, ensuring they continue to grow. An Egyptian ministry report on Sunday said that the country’s exports of non-petroleum products reached $14.89 billion in the first seven months of 2018, up 14.3 percent from last year.

Political turmoil and security issues have affected Egypt’s economy over the past few years, with tourism and foreign investments declining as budget deficit, inflation rate and foreign and domestic debts rose.

However, the country started a three-year reform program in 2016, which includes subsidy cuts, tax hikes and full floatation of the national currency, following a 12-billion-dollar loan from the International Monetary Fund.

In January, Egypt revised its GDP forecast for the 2017-18 fiscal year (beginning in July 2017) up to 5.3-5.5 percent, from 4.8 percent.