Egypt Signs Offshore Gas Deal with TotalEnergies Amid Supply Pressure

Egypt has signed a new offshore gas exploration agreement with TotalEnergies as it looks for fresh supplies. The agreement follows declining production at the Zohr gas field.

The deal, announced Wednesday, is with the state-owned Egyptian Natural Gas Holding Company (EGAS). It focuses on deepwater exploration in the Mediterranean off Egypt’s northwestern coast. The agreement sets out a framework for technical studies and early-stage exploration.

“We are pleased to launch this cooperation with EGAS,” said Nicola Mavilla. “This agreement will help assess Egypt’s deep offshore exploration potential.”

Declining Zohr Output Raises Concerns

The agreement comes as Egypt faces pressure from falling output at Zohr. The offshore field helped transform the country into a major gas producer after 2017.

Industry estimates show output has dropped sharply. Production fell from about 2.7 billion cubic feet per day in 2019 to roughly 1.2 billion today. The decline is a concern because natural gas still powers more than half of Egypt’s electricity.

In response, authorities are increasing offshore drilling. They are also expanding partnerships with international energy companies. The goal is to find new reserves and stabilise supply.

Balancing Domestic Needs and Export Ambitions

Egypt is also trying to maintain its role as a regional gas hub. It links supplies from Africa and the eastern Mediterranean to Europe and global LNG markets. Its liquefied natural gas export terminals remain central to this strategy.

For TotalEnergies, the deal strengthens its position in the eastern Mediterranean. Competition for new gas discoveries in the region has intensified. Egypt has already launched several offshore drilling programs in 2026. Companies are using existing infrastructure to speed up production if discoveries are viable.

The outcome will depend on results. New finds must be large enough to ease the country’s growing supply pressure.