The Oil & Gas Year Egypt 2016
Egypt has been facing socio-political upheaval since 2011, leading to the ouster of two presidents within two years, including its long-time leader, Hosni Mubarak. The instability has led to frequent blackouts and power cuts. Additionally, confidence in Egyptian markets has plummeted, with the Egyptian pound losing almost half of its official value against the dollar and foreign exchange reserves standing at USD 15.5 billion in August 2016, less than half of their total amount in 2010.
In 2013, Egypt accounted for 40% of dry natural gas consumption in Africa. It is the largest oil and natural gas consumer in the continent. As the supply of natural gas has dwindled in Egypt, demand has continued to rise by 8.4% per year from 2000 to 2012. What was once one of the region’s largest natural gas exporters has become an energy-starved importer. The country's hydrocarbons production has seen a decline since its historical peak in 1993 as fields matured, a situation compounded by political unrest following the Arab Spring political uprising in 2011, which saw many oil and gas companies cease drilling operations.
Yet the decline is poised to shift in light of notable hydrocarbons discoveries since 2015 with the potential to kick-start Egypt's exploration and production once again, namely BP's Atoll gas discovery in March 2015, Eni's Nooros and super-giant Zohr gas finds in 2015 and a BP-Eni consortium's expansion of discoveries in their Nile Delta deepwater concession in 2016. While these massive plays have the potential to make Egypt energy independent, the complex nature of deepwater projects and enhanced oil recovery required at the country's mature onshore projects will necessitate investment and technology from international oil companies at a time when Egypt's finances are struggling, a situation exacerbated by the global downturn in oil prices.
The country struck a fortune with the 850 bcm (30 tcf) super-giant natural gas field in the eastern Mediterranean, Zohr, which could meet more than half the country’s demand. The discovery was made by the Italian IOC Eni, whose total investment in the project will amount to USD 12 billion – 16 billion. The Egyptian government is pushing Eni to begin production by late 2017, with levels ramping up to full capacity by 2019, when the field is expected to produce 73.6 mcm (2.6 bcf) per day.
In June 2015, President Abdel Fattah El Sisi finalised a deal with German engineering giant Siemens to provide Egypt with three of the world’s biggest combined-cycle gas turbines (CCGT) plants with a 4.8 GW capacity each. Including 2 GW of wind farms, the deal was worth EUR 8 billion. The projects will add 16.4 GW of installed capacity to Egypt’s grid, an increase of more than 50% from the existing 30 GW.
The diversification of the domestic energy industry has become a high priority for Egypt as the country’s hydrocarbons demand exceeds its supply. At present, natural gas reserves account for 68.7% of Egypt’s energy production. Egypt has received investment pledges of over USD 20 billion USD for a range of renewable energy projects to develop its wind, solar and nuclear capabilities. Renewable energy has already made significant inroads in Egypt. In 2015, the Ministry of Electricity and Renewable Energy announced a strategy to boost the country’s renewable energy share by 2020, to reach targets of 12% wind, 6% hydroelectric and 2% solar energy.
The Oil & Gas Year Egypt 2016 delves into the implications of falling oil prices and declining domestic production on Egypt’s oil and gas industry amid rising energy demands and large-scale power generation and offshore E&P projects. The top insiders interviewed for the book include, Minister of Petroleum and Mineral Resources, Tarek El Molla; Egyptian General Petroleum Corporation CEO, Tarek El Hadidy; Suez Canal Authority chairman, Mohab Mameesh; Egyptian Gas Association chairman, Khaled Abubakr; Gulf of Suez Petroleum Company chairman and managing director, Abed Ezz El Regal El Mallahy; Egyptian LNG CEO, Omar Hilal; Egyptian Refining Company managing director, Mohamed Saad; Hassan Allam Construction CEO, Hassan Allam, among others.
Extensive analysis is backed with meticulously researched maps, illustrations and graphs to create a market guide indispensable for players seeking to make a move in Egypt.