The development of an energy reform strategy based on the market economy so as to introduce competition in the market segments is of crucial importance for provision of a stable and favourable environment for energy investments. Reform strategies have begun developing in most of the 12 Mediterranean Countries of North Africa and the Eastern Mediterranean, especially in the context of the Euro-Mediterranean Free Trade Area. Even though energy sector reforms have been initiated, they are still at an early stage in most of these countries. The majority of energy utilities remain state owned, vertically integrated monopolies. Few of these countries have established energy regulators, and where they have, these institutions have many difficulties in effective development. In addition, competition is virtually absent from the sector, and private participation has been confined to independent power plants, which tend to be introduced into unreformed sectors. The aim of this paper is to propose energy reform strategies for the reform of the sector by 2010 in terms of the development of the regional oil, gas and electricity sectors in these countries. (c) 2005 Elsevier Ltd. All rights reserved.