The Zohr gas field, located 190 km north of Port Said in the Shorouk Block, represents a major milestone in Egypt's energy sector. Discovered in 2015 by the Italian oil giant Eni, Zohr is estimated to hold 30 trillion cubic feet of natural gas across 100 square kilometers, making it the largest offshore natural gas discovery in the Mediterranean region or any part of Egyptian territory.
Location of Zohr gas field in Egypt
Development and Production
Development of Zohr progressed at record speed, with production beginning in December 2017, making it one of the fastest deepwater gas field developments in history. The project team oversaw the development of all phases of the project, from basic design to the installation of all necessary subsea pipelines transporting gas to ground handling facilities in Port Said.
Zohr has seen the largest deployment of vessels and equipment ever made by Saipem:
- Saipem 10000 drillship
- Castorone pipe-laying ship
- Saipem 7000 semi-submersible crane vessel
- Saipem FDS pipe-laying ship
- Saipem FDS2 crane vessel
- Castoro Sei pipe-laying crane vessel
- Castoro 10 pipe-laying ship
- Normand Maximus offshore support vessel
- Far Samson offshore support vessel
As of 2025, Zohr's production stands at approximately 2.7 billion cubic feet per day (bcfd), with Eni targeting 3.2 bcfd by year-end through the completion of the Zohr 6 and Zohr 13 wells. These efforts are underpinned by a $360 million investment in infrastructure, including the deployment of the Saipem 10000 drillship, which has become a symbol of the field's technological sophistication.
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Despite challenges such as reservoir pressure declines and water breakthroughs, Zohr's 1P reserves remain robust at 9.84 trillion cubic feet, offering a 45-year production horizon at current rates.
Despite these successes, Egypt’s gas sector encountered challenges in the 2020s, as technical issues at Zohr led to production declines, impacting domestic supply. Meanwhile, Egypt has embarked on efforts to revitalize Zohr’s production, with plans to drill new wells and boost output by 220 million cubic feet per day.
Egypt's Energy Landscape
Egypt has long pursued the expansion of its natural gas industry, leveraging its significant reserves to meet both domestic demand and international export obligations. In the 2000s, foreign investment played a crucial role in the expansion of Egypt’s gas industry. BP, Eni, and Gas Natural Fenosa developed major LNG export facilities, but rising domestic consumption led to reduced exports, idling much of Egypt’s LNG capacity.
In March 2015, BP announced a $12 billion investment to develop offshore gas fields in Egypt’s West Nile Delta, a project expected to contribute one-quarter of Egypt’s total gas output. BP planned to extract and process gas onshore, with production beginning in 2017. The investment included the Atoll field, which commenced production in 2018 and delivered approximately 300 million standard cubic feet per day (mmscfd) to Egypt’s national grid.
By 2014, Egypt shifted its energy strategy to prioritize domestic demand, which significantly curtailed gas exports.
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In February 2025, Egypt signed a $3 billion LNG deal with Shell and TotalEnergies for 60 cargoes of LNG, securing critical energy supplies for both domestic consumption and export markets.
With energy demand projected to grow by 6% annually, Zohr's output is critical to avoiding a repeat of the gas shortages that plagued the country in 2024. For investors, this translates to a dual opportunity: a stable domestic market and a growing export corridor to Europe and the Middle East.
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Partnerships and Policy
Eni's dual exploration model-selling minority stakes in newly discovered resources to generate immediate cash flow-has been instrumental in sustaining Zohr's development. This approach, combined with partnerships with the Egyptian General Petroleum Corporation (EGPC) and the Egyptian Natural Gas Holding Company (EGAS), has created a framework for shared risk and reward.
Recent geopolitical developments further bolster Zohr's strategic value. In June 2025, the EU signed a trilateral agreement with Egypt and Israel to facilitate Israeli gas exports to Europe via Egyptian infrastructure, positioning Zohr as a regional LNG hub. This aligns with Egypt's broader strategy to attract foreign investment, as evidenced by its $342 million deal with Shell and Cheiron Energy in 2024 and a $1.4 billion arrears repayment plan to incentivize international oil companies.
Technological Innovation
Zohr's success hinges on cutting-edge technology. Eni's use of 3D geological modeling and supercomputing has optimized reservoir management, while the Saipem 10000's advanced drilling capabilities have minimized operational risks. These innovations are not only extending the field's productive life but also setting a benchmark for deepwater gas extraction in the Mediterranean.
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For investors, the integration of technology into Zohr's operations signals a reduction in long-term volatility. As water breakthroughs and pressure declines are mitigated through enhanced recovery techniques, the field's cash flow stability improves, making it an attractive asset in a sector prone to cyclical swings.
Geopolitical Tailwinds and Energy Transition Opportunities
Zohr's strategic value is further amplified by its role in geopolitical realignments. With Europe seeking to diversify away from Russian gas, Egypt's proximity to the EU and its expanding LNG infrastructure-bolstered by five Floating Storage and Regasification Units (FSRUs)-position it as a critical transit node. The deployment of the Energos Force FSRU in Jordan's Aqaba Port in July 2025, for instance, underscores Egypt's ability to facilitate cross-border energy trade.
Meanwhile, the global energy transition is creating new demand for cleaner natural gas as a bridge fuel. Zohr's low carbon intensity-compared to coal and oil-makes it a compelling asset for investors seeking exposure to transition-aligned energy projects. Egypt's parallel investments in 2,000 MW of renewable energy capacity by 2025 further diversify its energy mix, reducing reliance on fossil fuels while maintaining gas as a transitional pillar.
Renewable Energy in Egypt
Egypt’s electricity demand has more than doubled over the past two decades, driven by rapid population growth and industrial expansion. The electricity sector in Egypt has evolved from full state control to a diversified energy mix, incorporating natural gas, renewables, and nuclear power, with increasing private sector involvement and regional interconnection.
Egypt has a high solar availability as a result of its hot desert climate. In some areas, the country receives over 4,000 hours of sunshine per year, which is among the highest quantities registered in the world. Due to the sharp population growth and a series of blackouts during the summer caused by a supply shortage, Egyptian demand for solar energy is increasing.
In 2021, Egypt signed contracts worth $700 million with the Kom Ombo Solar Energy Complex which would create 10,000 jobs. In 2024, Egypt embarked on a major renewable energy initiative by announcing the construction of two solar power stations with a total investment of 1 billion Egyptian pounds ($20.60 million), funded by a European Union grant. The projects, which include a 10-megawatt station at the Assiut Oil Refining Company and a 6.5-megawatt station at the Egyptian General Petroleum Corporation (EGPC), are integral to Egypt's strategy to achieve 42% of its electricity generation from renewable sources by 2030.
Egypt has a high potential for wind energy, especially in the Red Sea coast area. Egypt ranks third in Africa with 1,702 MW at the end of 2022, behind South Africa (3,442 MW) and Morocco (1,788 MW).
The majority of Egypt's electricity supply is generated from thermal and hydropower stations. The four main hydroelectric generating stations currently operating in Egypt are the Aswan Low Dam, the Esna Dam, the Aswan High Dam, and the Naga Hamady Barrages. Almost all hydroelectric generation in Egypt comes from the Aswan High Dam.
| Hydroelectric Station | Theoretical Generating Capacity |
|---|---|
| Aswan High Dam | 2.1 GW |
The Aswan High Dam has a theoretical generating capacity of 2.1GW; however, the dam is rarely able to operate at full design capacity due to low water levels. In 2011, Egypt produced 156.6 TWh gross, of which 12.9 TWh came from hydroelectric generation.
The percentage of hydropower energy is steadily declining due to all major conventional hydropower sites already having been developed with a limited potential for further increase in generating capacity. Even with the addition of the Asyut Barrage hydropower plant in 2016, hydropower development in Egypt is still lagging as the existing and developed hydropower plants are no longer being constructed at a rate that can support the increasing electricity consumption in Egypt.
Oil Reserves
Egypt has the sixth-largest proved oil reserves in Africa. Over half of these reserves are offshore reserves. Egypt is estimated to hold 12,446 million barrels (1,980 million cubic metres) initial recoverable liquid reserves.
After decades of production, it is estimated that the country has approximately 1,888.9 million bbl (300 million m3) recoverable oil remaining, as of January 2011. The Safaga-Quseir area of the Eastern Desert is estimated to have reserves equivalent about 4.5 million barrels (720×103 m3) of in-place shale oil and the Abu Tartour area of the Western Desert is estimated to have about 1.2 million barrels (190×103 m3) of in-place shale oil.
Apache Corporation, using substantial assets acquired in 2010 from BP after the Deepwater Horizon disaster, is the major operator in the Western Desert, often in joint ventures with Egyptian General Petroleum Corporation (EGPC) such as Khalda Petroleum Company and Qarun Petroleum Company. Apache has developed about 18% of the 10 million acres it controls, in 2012 running a score of rigs; drilling about 200 development and injection wells; and about 50 exploration wells with a success rate of about 55%.
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