Egypt is set to hike gas extraction prices by up to 30% following a major discovery by Italy’s Eni, as Cairo moves to incentivize foreign investment. The Ministry of Petroleum plans to price gas from the new Denise West 1 well at $7–$7.50 per million thermal units, an official familiar with the production file at the ministry told Al Manassa.
The find of 2 trillion cubic feet and 130 million barrels of condensates comes as domestic production declines and the regional war on Iran drives global energy costs higher. By offering rates that significantly exceed the $5.70–$6.50 currently paid for production from the giant Zohr field, the ministry aims to stabilize the national grid and reduce reliance on expensive liquefied gas imports.
Seeking to reverse a trend of falling investment, the ministry is also considering raising purchase prices for all gas discovered this year. The source, who requested anonymity, noted the move targets the injection of fresh capital into offshore concession areas following a period of mounting dues to foreign partners.
The discovery comes after drilling the exploratory well Denise West 1 in the Denise area off the coast of Port Said, which supports increased production, offsets natural decline, and reduces the import bill.
The ministry said in a statement on Facebook that “the new discovery is one of the fruits of incentive policies and the payment of partners’ dues.”
Expected daily production from the Denise West 1 well is estimated at 200–300 million cubic feet, the source said.
Located 70 kilometers off the coast of Port Said, the project’s proximity to existing infrastructure allows for rapid integration into the national grid by the next fiscal year.
The source emphasized that concession operators fund development under a fixed economic framework, recovering their capital through production shares.
This cost-recovery mechanism is distinct from the per-unit extraction fees the ministry is now considering raising, he added. The government will seek to accelerate production operations in coordination with partners to begin by next fiscal year.
The Ministry of Petroleum also announced Tuesday that the Gulf of Suez Petroleum Company (GUPCO) had drilled a new exploratory well in the South El-Wasl area of the Gulf of Suez, in a partnership between the Egyptian General Petroleum Corporation and its Emirati investment partner Dragon Oil, with production rates of approximately 2,500 barrels of oil per day and 3 million cubic feet of gas.
Last month, the Executive Managing Director of the Egyptian Natural Gas Holding Company (EGAS), Sayed Selim, confirmed the launch of a new global tender for gas exploration in the Western Mediterranean during 2026, as part of efforts to boost investment and increase local discoveries.
Egypt suffers from a widening trade deficit due to petroleum imports, the value of which rose in 2024–2025 to $19.4 billion.
