The agreement commits Cheiron to drilling three exploratory wells as Egypt seeks to reverse declining domestic gas production and reduce its growing dependence on imported supplies.
The Egyptian Ministry of Petroleum and Mineral Resources announced the deal on November 9, following a signing ceremony overseen by Petroleum Minister Karim Badawi.
The exploration programme includes drilling three wells and reprocessing existing seismic data to assess the area’s natural gas potential. The minimum investment exceeds $42 million, with the concession awarded to Cheiron in June 2025 following an international bidding round launched by EGAS.
Egypt seeks to strengthen its position in Africa’s gas industry
Cheiron is an Egyptian independent oil and gas company founded by businessman Salah Diab, who also established the PICO Group. Diab is the company’s chairman, making the agreement another major exploration commitment involving one of Egypt’s prominent private-sector energy players.
Egypt is Africa’s third-largest natural gas producer, behind Algeria and Nigeria, based on 2025 production figures. However, declining output from major fields, including the giant Zohr field, has put pressure on domestic supplies.
The country has increasingly relied on imported liquefied natural gas (LNG) and pipeline supplies to meet demand, particularly from its electricity and industrial sectors. The decline has also affected its ability to maintain gas exports through its LNG facilities.
The East Alexandria exploration deal forms part of Egypt’s wider effort to attract investment into its upstream energy sector, discover new reserves and improve domestic supply.
Any commercially viable discovery could help ease import requirements and strengthen Egypt’s position as a regional gas hub. However, the three wells are exploratory, and their results will determine whether the concession can contribute meaningfully to future production.
Source: africa.businessinsider.com
