Energy
From The Report: Egypt 2012
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With exploration continuing apace, the country’s hydrocarbons reserves continue to rise, and currently stand at 4.3bn barrels of oil and more than 77trn cu feet of gas. The Egyptian General Petroleum Corporation plays the roles of regulator, joint venture partner, licence provider, refiner and marketer for the oil segment. Egypt has the largest refining capacity in Africa, with 10 oil refineries and an overall capacity of 975,000 bpd, but an expansion plan calls for another 600,000 bpd of capacity by 2016. Though the price of gas remains lower than that paid in Europe, Egyptian industries see their competition coming from the countries of the Arabian Peninsula. Egypt had intended to use its gas resources to generate employment, but has found that the industrial activities it has attracted are not creating jobs at the pace imagined.
This chapter contains interviews with Peter Voser, CEO, Royal Dutch Shell; Hassan Younis, former Minister of Electricity and Energy; Giuseppe De Beni, Managing Director, Italgen.
Articles from this Chapter
Roll out the barrel: Some tough decisions will determine the path forward
OBG talks to Peter Voser, CEO, Royal Dutch ShellOBGplus
Interview: Peter Voser How does the level of political risk in Egypt affect investments in the petroleum sector? PETER VOSER: Egypt’s political situation has certainly affected the industry, though more so in downstream operations than in upstream activities. We are pleased to see the security situation improving. Shell has had a presence in Egypt for more than 100 years, so we have longstanding relations with the country. We expect to continue working with our partners to bring Egypt’s citizens…
Under the sea: Offshore drilling continues to grow around the worldOBGplus
While Egypt’s proven reserves for oil and gas are expected to continue growing, this increase will likely require moving exploration and production into more costly offshore deepwater blocks. Offshore drilling targets oil and natural gas deposits trapped beneath the ocean floor – or in some cases beneath inland lakes and seas – which are accessed through wellbores in the seabed. Wells are drilled from a variety of facilities, including platforms and deepwater mobile offshore drilling units,…
Block party: Further exploration is on the way following a new bidding roundOBGplus
That plans for Egypt’s upstream energy sector are proceeding, despite recent upheaval and political uncertainty, is testament to its importance to the national economy. Whereas many government departments declined to initiate new projects or make important decisions during the interregnum period, the Ministry of Petroleum (MoP) and corresponding government agencies have pushed forward with at least some of their plans. “Upstream interest is continuing, both onshore and offshore. The potential…
OBG talks to Hassan Younis, Former Minister of Electricity and EnergyOBGplus
Interview: Hassan Younis What incentives does the ministry provide to accelerate investments in renewable energy? HASSAN YOUNIS: The ministry is working hard to upgrade the electricity market to bring it in line with global standards in order to attract foreign investment. Renewable energy investment is currently encouraged in two ways – through a competitive bidding system and via a feed-in tariff scheme. Several incentives have been developed to encourage more focus on renewable energy investment…
OBG talks to Giuseppe De Beni, Managing Director, ItalgenOBGplus
Interview: Giuseppe De Beni How can the efficiency of Egypt’s electricity sector and its investment potential be improved? GIUSEPPE DE BENI: Egypt has set a very ambitious target to have 20% of total energy capacity installed from renewable energy in 2020. This would mean 7000 MW installed before 2020, and the contribution of the private sector is crucial to meet the target. In order to attract foreign investors, the country has to quickly define a clear legislative framework, which is…
Mind the gap: Keeping pace with rapid growth in electricity demand is a major challengeOBGplus
A large and rising population presents Egypt’s government with the challenge of keeping up the current level of basic services while meeting the demands of the growth to come. In the electricity sector, that means remaining in expansion mode for decades to come. However, the growth cannot follow the path it has in the past, when Egypt used natural gas extracted from its domestic reserves as the basic feedstock for electricity generation. Gas supplies are finite, and most of the biggest potential…
When the wells run dry: The debate over production levels seems set to continueOBGplus
Peak oil, put simply, refers to the point in time when global oil extraction reaches its maximum capacity. After this point, the rate of production enters into terminal, irreversible decline. As a theory, it has generated more controversy than is perhaps appropriate for what remains a logical statement of fact. That is, oil, like any finite resource, cannot continue to be extracted in increasing quantities forever. Indeed, this is as true for Egypt as it is for any other country: its oil reserves…
Plenty more efficiency: Deregulation among the likely developments in the downstream segmentOBGplus
In the summer of 2012 the pressure on Egypt’s downstream oil sector was increasing, due to short-term concerns linked to the country’s political instability. Some types of fuel were in short supply, and sector reform was widely considered one of the most pressing priorities for the government. DUAL ROLE: The private sector has been allowed to participate in the marketing and distribution of oil-based products since 1990. As of mid-2012 there were 12 companies in the sector – four state…
Up and atom: Plans for a new nuclear plant are on track, despite some oppositionOBGplus
Nuclear power has long been the subject of intense discussion, and ever more so in the wake of meltdowns and accidents. Fears of environmental and health risks have sparked fierce resistance in some quarters against a form of power generation that is cheap, clean and long-lasting after incidents at Chernobyl, Three Mile Island and Fukushima – often with dramatic results. Shortly after the Fukushima incident, Japan shut down 52 nuclear power plants that accounted for 30% of its total power generation.…
Shale storm: The discovery of a new gas source in the US has major ramifications for markets and producersOBGplus
With an insatiable demand for power to fuel their economies and few reserves of their own, European countries have been in an increasingly symbiotic relationship with the hydrocarbons giants of the Middle East and North Africa (MENA) region, but this may be set to change as shale gas discoveries in the US shake up energy markets around the world. Italy imported some 1.21trn cu feet of natural gas from North Africa in 2008, while Spain bought 316.8bn cu feet the same year. In return, the hydrocarbons-producing…
Continental divides: African gas production is becoming increasingly competitiveOBGplus
For more than 40 years now, Egypt has been pumping natural gas, with its first discoveries coming in the still-rich Delta region, but over the past 15 years, the country’s prominence as a major producer has risen significantly. Gas reserves were equivalent to more than 77trn cu feet (tcf) by the middle of 2011, an increase of about 50% from the start of the last decade, and with more than 150 commercially feasible discoveries coming over the past decade, the expectations for future growth are…
Blocked pipes: Controversial gas exports to Israel have been halted indefinitelyOBGplus
The Arish-Ashkelon pipeline from Egypt to Israel is, perhaps apart from domestic subsidies, the most controversial element of the country’s energy sector, with many Egyptians angry about selling a precious resource to a country whose policies they oppose. In 2010 Israel was the destination of 38% of Egyptian gas exports, but a string of attacks on the pipelines took place almost immediately after the revolution of early 2011, making the export of gas to Israel – as well as to the Arab…
