Chevron and other companies exit Egypt's Red Sea concessions, redirect resources

Zawya

18-04-2025

A number of multinational oil and gas companies including Chevron have exited their Red Sea oil and gas concession blocks after making no finds and have channelled their resources elsewhere in the country, the Egyptian petroleum ministry said.
As part of its efforts to become an energy hub, Egypt awarded oil and gas exploration concessions in the Red Sea for the first time to Chevron, Shell and Abu Dhabi sovereign wealth fund Mubadala Investment Company in an international tender in 2019.
"Companies have spent millions on their concessions within the agreed time frames," ministry spokesperson Moataz Atef told reporters on Thursday.
He said: "One company spent $34 million on a contract that initially stipulated it will invest $10 million on exploration, but found no results," without naming said company.
Chevron confirmed it has relinquished its operated 45% stake in Red Sea Block 1, located in the northern Red Sea.
'Chevron remains committed to working together with the government of Egypt and our partners to support the growth of Egypt's energy sector through our exploration programs in the Mediterranean,' spokesperson Sally Jones said in a statement on Friday.
Chevron operates the block along with other shareholders including Australia's Woodside Energy. Shell operates Block 3 with others including Woodside Energy and QatarEnergy.
Atef did not name the other companies that he said had relinquished their Red Sea blocks. Shell declined to comment. Mubadala, Woodside Energy and QatarEnergy were not immediately available for comment.
The petroleum ministry spokesperson stressed his ministry still believed the concession areas could be fruitful.
He said both Shell and Chevron had applied for new concessions in the Mediterranean Sea, reaffirming their commitment to Egypt's oil and gas sector, without giving further details.
Chevron spokesperson Jones said it had interest in three other exploration blocks in Egypt, including two as an operator in the Mediterranean.
In January 2024, Egypt's gas production was 4.6 billion cubic meters of gas. Despite pushing for further increases, production remained on a downward trend, recording 3.6 billion cubic meters in January 2025, data from the Joint Organisations Data Initiative show.
Regarding energy supply, Atef sought to give assurances that Egypt would be able to meet rising electricity demand this summer.
"By the summer, we will have three to four floating storage and regasification units to help stabilize the supply of natural gas," he said, adding that LNG shipments have been secured, while an emergency plan is in place to address any unexpected demand spikes.
Last summer, Egypt faced power shortages exacerbated by high cooling demand. The country resorted to load-shedding and imports costing around $1.18 billion.
(Reporting by Mohamed Ezz and Jaidaa Taha; Editing by Alison Williams)