Egypt’s natural gas output drops to 6-year-low threatening its status as energy exporter

Egypt's natural gas production reached a six-year low in May, according to data cited by Bloomberg. This decline in production comes at a time when the country is experiencing soaring temperatures, leading to a significant increase in energy demand, especially for air-conditioning. Daily power consumption has surged by 12% compared to last year, as reported by Prime Minister Mostafa Madbouly.

Bloomberg notes that Egypt’s Petroleum Minister revealed a 25% drop in oil and gas production over the past three years. The minister attributed this decline to arrears owed to foreign oil companies, which have impeded investments in energy exploration projects.

Once an energy exporter, Egypt now imports large quantities of Liquefied Natural Gas (LNG) to meet its domestic demand, a costly measure for a country that recently received a $57 billion bailout from the UAE, EU, World Bank, and IMF.

In response to the energy crisis, the government has implemented daily power cuts lasting up to three hours, even amid deadly heat waves. Facing considerable public discontent, the Egyptian government has pledged to end these blackouts this week.

To address its long-term energy challenges, the government is looking towards renewable energy sources. Currently, natural gas is the primary power source, but Egypt aims to generate 58% of its electricity from renewables by 2040.