Energy & Utilities
From The Report: Egypt 2014
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The extraction of oil and gas has long played a central role in the Egyptian economy, accounting for 15.3% of the country’s GDP in the 2013/14 financial year. With exploration in the North African nation dating back to the 1880s, the government has a long history of working with private firms to develop and manage its resources. Over the course of 2014 Egypt’s energy sector has seen some welcome developments. The announcement of a debt-repayment programme for funds owed to international oil companies (IOCs) has restored confidence in the upstream segment and brought pledges of increased investment from larger operators such as the UK’s BP. In the meantime, exploration for new resources continues. However, considerable challenges remain to be overcome, and the power outages that Egyptian individuals and businesses faced in 2014 are likely to remain a part of daily life for some time to come.

This chapter contains interviews with Sherif Ismail, Minister of Petroleum and Mineral Resources; Ross Clarkson, CEO, TransGlobe; and Ibrahim Sarhan, Chairman, e-finance.

Articles from this Chapter

Overview

Efforts are being devoted to increasing production and capacity, despite some delays
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Over the course of 2014 Egypt’s energy sector has seen some welcome developments. The announcement of a debt-repayment programme for funds owed to international oil companies (IOCs) has restored confidence in the upstream segment and brought pledges of increased investment from larger operators such as the UK’s BP. The government has also demonstrated its willingness to tackle the underlying problem of the current energy pricing mechanism, by taking the first steps to weaning the nation off…

Interview

OBG talks to Sherif Ismail, Minister of Petroleum and Mineral Resources
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Interview: Sherif Ismail In which areas do you see the greatest commercial potential for new upstream activity? SHERIF ISMAIL: Oil production in Egypt is promising as numerous oil discoveries have been made, including gas in the Mediterranean Sea, the Nile Delta and the Western Desert, much of which recently began producing. Among them are West Delta Deep, with investments worth $1.6bn, Dennis and Karawan (worth $556m), Desouk ($300m), and El Aseel ($307m). Some projects were scheduled to add to…

Interview

OBG talks to Ross Clarkson, CEO, TransGlobe
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Interview: Ross Clarkson What can be done to stimulate foreign direct investment in Egypt’s upstream segment? ROSS CLARKSON: First of all, investor confidence has been severely impacted by the turbulence of recent years, which has led to some companies scaling back investment levels. Nevertheless, Egypt will certainly emerge from the current crisis and international oil companies (IOCs) will eventually have the opportunity to continue growing their businesses through asset acquisitions, bid round…

Analysis

The government must weigh support for subsidies against the need for more sustainable development
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Thanks to their lengthy development cycles, Egypt’s oil and gas fields have continued to attract foreign investment steadily over the past three years, in spite of the broader instability in the country. The reserves remain extensive enough to ensure continued interest in them for years to come. Nevertheless, there has been a plateau in production levels and, due to rising consumption, shortages of crucial supplies of natural gas in the domestic market. As a result, the government has been keen…

Analysis

Working to increase solar’s contribution to the national energy mix
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Solar energy has played a secondary role to wind power within Egypt’s renewables strategy for some time, despite the nation’s obvious advantages in terms of abundant sunlight and large tracts of undeveloped land. In 2014, however, brought a number of clear indicators that suggest that solar power remains very much front and centre in the government’s vision for the energy sector, which has imbued the nascent industry with a fresh sense of optimism. Ahmed Farid Moaaz, country manager at Sea…

Interview

OBG talks to Ibrahim Sarhan, Chairman, e-finance
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Interview: Ibrahim Sarhan In light of the challenge of meeting rising energy demand, how can electronic processes improve the rationalisation of energy subsidies? IBRAHIM SARHAN: Programmes such as the smart card system allow better control over the product, and so help subsidies reach those in need more effectively and efficiently. In the case of energy subsidies, electronic processes improve the information available about the recipient of the subsidies and the product being subsidised. It also…

Analysis

The sector must tackle increasing local demand while trying to ramp up exports
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With some of the largest reserves of natural gas on the continent and a robust long-term upstream outlook, Egypt’s natural gas industry has made a significant turnaround by switching from exporting to importing. In the first decade of this century, Egypt went about exploiting its gas resource with great success, doubling production between 2000 and 2006. However, after a peak production rate of 2.21trn standard cu feet (scf) per annum in 2009, according to the “BP Statistical Review of World…

Analysis

Between encouraging efficiency and improving capacity, the national grid is set to undergo improvements
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Over the past year the shortfall in Egypt’s electricity capacity has become increasingly apparent, with load-shedding becoming a regular occurrence. The government has aggressively sought to address the issue with demand-side management, from a reintroduction of the daylight savings time regime, which had been dropped in 2011, to an initiative to replace standard light bulbs with high-efficiency ones. The Egyptian Electricity Holding Company (EEHC) has also announced plans for the introduction…