Exxon Mobil Corp. has discovered natural gas off the Mediterranean coast of Egypt, marking a potentially pivotal moment for the nation as it seeks to revive declining production levels, according to the several media reports. The Texas-based energy giant announced the successful completion of its exploratory Nefertari-1 well in the North Marakia Block, situated roughly five miles off Egypt’s northern coastline. In a statement, Exxon revealed that "gas-bearing reservoirs were encountered" and confirmed ongoing evaluations of the findings.

The Eastern Mediterranean has garnered significant attention as a hotspot for natural gas exploration following major discoveries off the coast of Israel in 2009 and 2010. This region's strategic location, close to energy-hungry markets in Europe and the Middle East, enhances the economic appeal of any new reserves. However, political instability in the area presents a notable challenge to sustained development. Other global energy players, including Chevron Corp., BP Plc, Shell Plc, and Eni SpA, also hold stakes and maintain active exploration projects in the region.

Exxon initially entered the North Marakia Block in 2019, subsequently selling a 40% stake to QatarEnergy in 2022. The drilling of the Nefertari-1 well was executed using Valaris Ltd.’s DS9 drillship.

Egypt, once poised to become a critical energy hub and supplier to Europe, has faced significant hurdles in maintaining its natural gas output. In June, production dropped to its lowest levels since 2017, compelling the nation to increase imports of liquefied natural gas (LNG) to levels not seen in six years. These challenges have been exacerbated by a severe dollar shortage, which has led foreign energy companies to curtail investments due to overdue payments from the Egyptian government.

To address these setbacks, Egypt has initiated a monthly repayment program aimed at regaining investor confidence and revitalizing production. The government is targeting a return to natural gas exports by the end of 2027. Efforts to bolster output are already underway, with Eni SpA announcing plans to enhance production at its flagship Zohr gas field and BP Plc gearing up to commence operations at two new gas wells in the Raven Field by February. Meanwhile, Apache is actively expanding both oil and gas production in Egypt’s Western Desert.

Exxon’s recent discovery, alongside ongoing developments by other major players, underscores the significant potential of the Eastern Mediterranean as a key energy-producing region. However, its long-term impact will depend on Egypt's ability to address its economic challenges and restore stability to its energy sector.