Emirati Dana Gas launches $100 mln investment programme to boost Egypt gas production - Energy
The two-year programme includes drilling 11 appraisal and exploration wells, as well as recompleting existing ones.
It is expected to add approximately 80 billion cubic feet (bcf) of recoverable gas reserves and significantly enhance the company's long-term production profile in Egypt.
The investment plan has already yielded early success, with the completion of the Begonia-2 appraisal well in the New El-Manzala concession.
Begonia-2, operated by the company's joint venture with the Egyptian government, Wastani Petroleum Company (WASCO), has confirmed initial reserves of 9 bcf of gas and is set to deliver 5 million standard cubic feet daily (mmscfd) in additional output.
It is the first well to be drilled under the programme, signalling the start of intensified exploration and development activity in the area.
In parallel, Dana Gas has initiated recompletion work on the Balsam-3 well, redeploying the EGYPTCO rig to tap previously unproduced geological layers.
Once completed, the well is expected to add 4 billion cubic feet (bcf) in reserves and an additional 3 million standard cubic feet per day (mmscfd) in production. Its recompletion is anticipated to mitigate exploration risks and further strengthen gas output from existing assets.
'This $100 million programme marks a strategic milestone for Dana Gas in Egypt. The drilling success at Begonia-2 and the start of work on Balsam-3 are just the beginning. With improved fiscal terms under our new concession consolidation agreement with EGAS, we are now well-positioned to unlock more value from our Egyptian portfolio,' said CEO of Dana Gas Richard Hall.
'Our continued investment reflects our long-standing commitment to Egypt and to supporting its energy security agenda. Timely and consistent payments from our partners remain critical to the success of this programme and to ensuring its sustained momentum,' he added.
Drilling is being carried out using the EDC-54 rig, with the following well scheduled to spud in August. The company also plans to re-enter other wells during the programme's timeframe to maximize recovery from existing assets.
Earlier in July, Minister of Petroleum and Mineral Resources Karim Badawi visited the Begonia-2 site to observe the commencement of operations and review project progress.
His visit aligns with the government's broader strategy to enhance natural gas production through upstream investment incentives and regional collaboration.
Dana Gas has operated in Egypt for over a decade and remains one of the country's key private sector contributors to gas production.
The company's total proven and probable (2P) reserves exceed one billion barrels of oil equivalent (BOE), with an average daily production of 55,000 BOE in 2024. Its regional presence spans Egypt, the Kurdistan Region of Iraq (KRI), and the UAE.
As Egypt continues to navigate growing energy demands amid fluctuating domestic gas production, the government is intensifying efforts to reinforce its energy security through a combination of infrastructure upgrades and fiscal commitments.
Last week during a press conference, Prime Minister Mostafa Madbouly announced the full integration of all Floating Storage Regasification Units (FSRUs) into the national gas network.
Currently, three FSRUs are stationed in Ain Sokhna, positioned to serve as emergency backups in the event of disruptions to the country's conventional gas supply. While the units have not yet been activated at full capacity, Madbouly emphasized their role as a strategic reserve to ensure uninterrupted access to natural gas, particularly during peak summer consumption periods.
Furthermore, two more FSRUs are expected to arrive soon: one set to be deployed at Alexandria Port and the other at Jordan's Aqaba Port. These deployments are part of Egypt's broader contingency plan to secure its energy system against potential shortfalls during high-demand months.
The government is also making headway in addressing long-standing financial liabilities in the energy sector.
In this respect, Madbouly said Egypt has recently repaid more than $1 billion in overdue payments to foreign oil and gas partners.
While acknowledging that a significant backlog remains, he reaffirmed Egypt's renewed commitment to settling monthly invoices regularly, thereby gradually reducing its accumulated energy debt.
By the end of 2025, an additional $1.4 billion in payments is scheduled to be made, as part of a strategy to restore investor confidence and support future investment in the country's energy production.
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