Egypt - Oil and Gas EquipmentEgypt - Oil and Gas Equipment
OverviewOil and gas is one of the most dynamic industries in Egypt, and hydrocarbon production is by far the largest single industrial activity, representing approximately 16 percent of Egypt’s GDP.
Egypt has significant energy resources, both in traditional fossil fuels and in renewable energy. Egypt’s proven hydrocarbon reserves stood at 3.5 billion barrels of oil and 65.2 trillion cubic feet (tcf) of natural gas at the end of 2015. The Egyptian government encourages international oil companies (IOC) to participate in the oil and gas sector, and currently more than fifty IOCs are operating in Egypt.
Egypt plays a vital role in international energy markets through the operation of the Suez Canal and Suez-Mediterranean (SUMED) pipeline. Expanded in 2015, the Suez Canal is an important transit route for oil and liquefied natural gas (LNG) shipments travelling southbound from North Africa and along the Mediterranean Sea to Asia. Fees collected from the operation of these two transit points are significant sources of revenue for the Egyptian government.
Egypt has the largest refinery capacity in Africa at a nominal 840,000 barrels per day, although it operates well below this capacity, with 522,000 barrels per day processed in 2015. Currently the government is updating existing refineries, and a new private-sector refinery is also set to begin production. Egypt plans to invest USD 14.5 million developing its petrochemicals sector over the next five years. The petrochemical sector represents about 12% of industrial production and generates revenues totaling USD 7 billion, equivalent to nearly 3% of GDP.
The petroleum industry in Egypt is managed by the Ministry of Petroleum, under which five companies function as government agencies.
- The Egyptian General Petroleum Corporation (EGPC)
- Egyptian Natural Gas Holding Company
- Egyptian Petrochemicals Holding Company
- Ganoub El-Wadi Holding Company
- Egyptian Geological Survey and Mining Authority
Since the 1990s, the Egyptian government has enacted laws aimed at attracting international, regional and domestic investments. These laws sought to address the regulations and procedures that hindered production and facilitated investment resolutions.
One of the challenges that continue to hamper international investors in Egypt’s oil and gas sector is the long history of delayed payments from EGPC. While the government has made efforts to pay out the remaining backlog of arrears to IOCs in order to encourage more foreign partners to invest in exploration and development activities, the government still lags behind. The government has reduced arrears from a peak of USD 6.3 billion in 2013 to USD 3.2 billion as of Mar. 31, 2016.
The oil sector in Egypt has signed 73 oil and gas exploration deals with IOCs in the past three years, worth at least USD 15 billion, and signing bonuses of more than USD1 billion for the drilling of 306 wells. In May 2016, a new international bidding round was announced, including 11 blocks for Gulf of Suez and Western Desert.
GOE investment in natural gas was expanded by 33% in FY 2016, adding to an expansion of 32% the previous fiscal year. Crude oil projects did not see a similar favorable return on investment, but that is not to say the opportunities are not there in 2017, as several multinational firms announced commitments to increase their investment to total USD 10 billion over the next five years.
In August 2015, Italian Energy Company Eni made a supergiant gas discovery at its Zohr Prospect in the deep waters off Egypt’s Mediterranean coast, with a potential 30 trillion cubic feet (tcf) of lean gas in a reservoir of about 100 square km. Zohr is the largest gas discovery ever made in Egypt or the Mediterranean Sea. The Ministry of Petroleum announced that early production will take place in December 2017, with startup up to 1,000 mmscdf to reach full production of 2,700 mmscfd in 2019.
- Compressed Natural Gas (CNG) Technology and Peripherals
- Drilling Rigs and Related Equipment and Accessories
- Hi-tech Test and Measuring Equipment
- Liquefied National Gas (LNG) Related Technology
- Natural Gas Vehicles (NGV) Technology and Peripherals
OpportunitiesThere are opportunities for U.S. companies in exploration activities, services, sub-contracting, procurement and engineering services, as well as good opportunities with petrochemical projects.
Web ResourcesU.S. Commercial Service in Egypt
The Egyptian Ministry of Petroleum
Ministry of Investment
General Authority for Investment and Free Zones
Egypt State Information Service
American Chamber of Commerce in Egypt
Egyptian Government Web Portal
Contact for the Commercial Specialist in charge of the Energy sector: Mai Abdelhalim, Mai.Abdelhalim@trade.gov
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Egypt Energy Trade Development and Promotion