US energy giant Chevron, which operates Israel’s Tamar and Leviathan gas fields off the Mediterranean coast, announced on Sunday that it made a “significant” new gas discovery in an Egyptian offshore field.
“Chevron is encouraged and excited by the success of this first exploration well which encountered high-quality reservoirs and follows from Chevron’s entry into the Egyptian upstream sector in 2020,” said Clay Neff, president of Chevron International Exploration and Production. “The Eastern Mediterranean has abundant energy resources, and their development is driving strategic collaboration in the region.”
The new gas discovery is located at the Nargis-1 exploration well, which is part of Egypt’s 1,800 square kilometers Nargis Offshore Area concession. With a 45% working interest, Chevron is the operator of the concession. The Middle East Economic Survey reported in December that the size of the new well was 3.5 trillion cubic feet of gas.
“The Nargis-1 well encountered approximately 200 net feet (61 m) of Miocene and Oligocene gas bearing sandstones and was drilled in 1,014 feet (309 m) of water by the Stena Forth drillship,” Chevron said in a statement.
The announcement comes as Chevron has been seeking to explore further routes to sell gas from the eastern Mediterranean, and Egypt and Israel have been pushing efforts to become an energy hub in the region.
Israel and Egypt have emerged as gas exporters in recent years following major offshore discoveries, as Europe is determined to wean itself off dependence on Russian gas imports in the wake of its invasion of Ukraine.
In June, Israel, Egypt and the European Union signed a memorandum of understanding that will see Israel export its natural gas to the bloc for the first time. According to the agreement, Israeli gas will be supplied via Egypt’s liquefied natural gas (LNG) plants to the EU.
Chevron owns a 39.66% stake in Israel’s Leviathan gas reservoir, one of the world’s largest deep-water gas discoveries, which contains an estimated 22 trillion cubic feet of gas. Meanwhile, Chevron last year signed a deal with Egypt’s state-owned gas company Egyptian Natural Gas Holding Company (EGAS) to explore the transport, import, liquefication and export of natural gas from the eastern Mediterranean.
Chevron, which also operates and holds a 25% stake in the Tamar gas field off Israel’s Mediterranean coast in December, announced a final investment decision (FID) needed to proceed with the first phase of expanding natural gas production to meet growing domestic demand and boost exports to Egypt. As part of the FID, the partners in the Tamas natural gas rig, located some 90 kilometers (55 miles) west of Haifa, are expected to invest some $673 million in a project expanding gas production from the offshore field.
Natural gas operations have put Israel on a path to energy independence — and have shielded it from the worst of the energy crisis sparked by the Russian war on Ukraine this year — in a country with few natural resources.