The Egyptian Natural Gas Holding Company (EGAS) has signed an agreement with Chevron to explore for and develop gas and crude oil in the offshore Lotus Block in the Mediterranean, with an initial investment of $88 million. Egypt’s Ministry of Petroleum and Mineral Resources announced the deal on Monday.
The block lies about 200 km off the Mediterranean coast in water between 2,000 and 2,800 metres deep. The work programme includes drilling two exploratory wells and reprocessing 3D seismic data. No deep exploratory well has ever been drilled in the area, and the companies hope to find new gas and oil there. The Lotus Block adds to Chevron’s six offshore blocks in the region, the latest being Cyprus’s Aphrodite gas field, and the ministry has been working with the company to speed up agreements that would connect Aphrodite to Egyptian infrastructure.
Petroleum Minister Karim Badawi said the deal supports the ministry’s plan to widen exploration and lift domestic output. The ministry’s five-year plan targets a 20 per cent increase in oil and gas exploration and production. EGAS intends to drill 36 exploratory wells at a total cost of $177 million, aiming for 44,000 barrels per day in fiscal 2026/2027 and 65,000 barrels per day by fiscal 2030/2031.
Investor sentiment has been helped by Egypt’s handling of arrears. In June 2026 the government cleared all dues to foreign oil and gas partners ahead of schedule, cutting outstanding payments to zero from $6.1 billion at 30 June 2024, and foreign partners have since moved faster on drilling and development. Badawi said the ministry would keep offering acreage in the Mediterranean, Western Desert, Delta, Gulf of Suez, Sinai and southern Egypt, and continue seismic surveys to “offer international companies new exploration areas” with more up-to-date geological data. The near-term goal is to add about 330 million cubic feet per day of domestic gas production before the end of 2026, narrowing the gap between local supply and demand. The ministry expects better geological data to help companies spot opportunities sooner, step up drilling and bring fields into production faster. The ministry is pursuing a parallel overhaul of mining, where it wants to move beyond extraction into higher-value industrial production through financing, mineral processing and foreign partnerships. The government aims to raise mining’s share of GDP to about 6 per cent from less than 1 per cent today.
