Shell plc’s ( SHEL Quick Quote SHEL - Free Report) subsidiary, Shell Egypt, made a significant natural gas discovery in the North East El-Amriya block of the Mediterranean Sea. This momentous achievement marks the culmination of drilling operations at the Mina West-1X exploratory well, the first of three wells planned for the Mina West exploration project. Site of the Discovery
The drilling activities took place in the offshore Nile Delta, approximately 250 meters below the sea level. The presence of a significant natural gas reservoir is strongly suggested by preliminary data analysis. This discovery holds immense potential for boosting Egypt's energy landscape and propelling Shell Egypt's growth trajectory.
Significance of the Discovery
Khaled Kacem, vice president and country chair of Shell Egypt emphasized the discovery as a significant step forward, highlighting the company's commitment to growth and its role in Egypt's energy sector.
Shell Egypt hired Stena Drilling, an independent contractor, to deploy a specialized mobile offshore drilling unit to help with drilling operations. This strategic collaboration demonstrates the company's commitment to leveraging cutting-edge technology and expertise to maximize exploration success.
Impact on Egypt's Energy Landscape
This discovery aligns with Egypt's ambitious plans to expand its energy infrastructure and diversify its energy portfolio. In July 2023, Tarek El-Molla, Egypt's minister of Petroleum and Mineral Resources, revealed a $1.8 billion plan to drill 35 new gas wells across the Mediterranean Sea by 2025.
As part of this initiative, 21 gas wells are slated for drilling during fiscal 2023-2024, followed by an additional 14 wells in the subsequent year. Major international companies, including Shell, and
Chevron ( CVX Quick Quote CVX - Free Report) are actively involved in this ambitious endeavor. Egypt's Commitment to Renewable Energy
El-Molla emphasized the Egyptian petroleum sector's unwavering commitment to exploring new oil and gas resources. Over the past five years, Egypt has made remarkable strides in this domain, discovering 284 new fields, comprising 217 oil wells and 67 gas wells.
These discoveries have significantly supported Egypt's oil reserves, with an estimated addition of 1.32 billion barrels. This substantial increase in reserves has translated into a notable production boost, further strengthening the country’s energy security.
The discovery of natural gas in the North East El-Amriya block of the Mediterranean Sea is a milestone for Shell Egypt and a promising development for Egypt's energy sector. It has the potential to boost the country’s energy production and contribute to its economic growth.
Zacks Rank and Key Picks
Currently, both SHEL and CVX carry a Zacks Rank #3 (Hold).
Investors interested in the
energy sector might look at some better-ranked stocks like Liberty Energy Inc. ( LBRT Quick Quote LBRT - Free Report) and Oceaneering International, Inc. ( OII Quick Quote OII - Free Report) , both sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Liberty Energy is valued at $3.35 billion. LBRT currently pays a dividend of 20 cents per share, or 1.01% on an annual basis.
LBRT is a leading provider of hydraulic fracturing and other auxiliary services to North American onshore exploration and production companies.
Oceaneering International is worth approximately $2.12 billion. In the past year, its shares have risen 39.9%.
The company provides engineered services and products, and robotic solutions to the offshore energy, defense, aerospace, manufacturing and entertainment industries worldwide.