This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 9/18/2018
Overview
Oil and gas is one of the most dynamic industries in Egypt, and hydrocarbon production is by far the largest single industrial activity, representing in 2016/2017 approximately 16 percent of Egypt’s GDP and 30 percent of the FDI in country.

Egypt has significant energy resources, both in traditional fossil fuels and in renewable energy. Egypt’s proven hydrocarbon reserves stood at 3.3 billion barrels of oil and 62.8 trillion cubic feet (tcf) of natural gas at the end of 2017. 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 508,000 barrels per day processed in 2017. Currently the government is updating existing refineries, and a new private-sector refinery is also set to begin production. Egypt plans to invest around $38 billion 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
The Egyptian General Petroleum Corporation (EGPC) concludes concession agreements in cooperation with IOCs in the form of production sharing agreements (PSA). Egypt grants concessions in a specific area through the promulgation of a “special law” by the Egyptian Parliament.

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 to USD 1.2 billion as of June 2018 and planning to repay all by end of 2019.

The oil sector in Egypt has signed around 83 oil and gas exploration deals with IOCs between November 2013 and December 2017, worth at least USD 15.5 billion, and signing bonuses of more than USD 1 billion for the drilling of 319 wells.  In 2018, a new international bidding round was announced, including 9 blocks for Gulf of Suez and Western Desert. 

GOE investment in natural gas was expanded by 25% in FY 2017, adding to an expansion of 33% 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 in fiscal year 2018/2019.

In December 2017, Egypt’s Zohr gas field started production.  The Zohr field is considered the largest discovery ever made in the Mediterranean Sea. Production is estimated at 30 trillion cubic feet (tcf).
 
Leading Sub-Sectors

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Egypt Energy Trade Development and Promotion