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Petroleum Sector Developments in Egypt
A comprehensive overview of Egypt's petroleum sector with focus on recent developments in the local oil, natural gas, and petrochemicals industries.
(March 2009)
Members: LE350, Non-members: LE500, Int'l Price: $500
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Summary
After a recent period of steady growth, global oil production and reserves have declined for the first time since 2002. Global demand for oil continued to increase up to the first quarter of 2008; however, for the first time since 1983, it has gone into decline due to the global financial crisis. Demand for natural gas - an attractive, cheaper alternative to oil - had also been also increasing but is now in decline for similar reasons.
The petroleum sector is a key factor in the growth of Egypt's economy; accounting for 15% of GDP in 2007/2008. Oil and gas cover 94% of Egypt's primary energy requirements with crude oil production in 2007 standing at 710,000 barrels per day (bpd), and natural gas production at 46.5 billion cubic meters, nearly double 2002 production levels. Egypt is the second largest producer of natural gas in Africa.
The Ministry of Petroleum has granted several concessions for exploration and drilling activities to increase crude oil and natural gas production. Particular emphasis has been placed on the oil sector - where production has been in decline since 1993 - in an attempt to meet increasing domestic demand.
In an attempt to accommodate the global hike in energy prices, Egypt has taken several measures to adjust the domestic and export prices of both oil and gas to reduce the budget deficit on the domestic front.
Egypt's petrochemical sector represents 12% of its total industrial production and the country is set to become one of the region's leading players, especially with the implementation of the National Plan for Petrochemicals (2002-2022).
The challenges of finding sustainable means of meeting future energy needs and reducing greenhouse gas emissions have led many countries, including Egypt, to opt for renewable energy sources, such as biofuels, wind power, thermal energy and nuclear. Egypt possesses abundant renewable energy sources and has begun to integrate these alternatives within its energy mix and to promote renewable energy technologies on a commercial scale.
SECTOR HIGHLIGHTS
- Egypt ranked third in Africa in 2007 in terms of proven natural gas reserves which were estimated at 2.06 tcm.
- A total of 54 new petroleum discoveries were made during 2007/2008.
- Egypt crude oil production in 2007 stood at 710 thousand bpd and natural gas production reached 46.5 bcm.
- A new industrial energy policy was introduced in August 2007 for the gradual removal of energy subsidies over a 3-year period.
- Egypt's refining sector is set for new expansions and capacity upgrades.
- Egypt's petrochemical production capacity is expected to reach 15 million tpa, generating annual revenues of about US$15 billion from exports by the year 2022.
- Egypt adopted a national strategy to produce 20% of all its generated electricity using renewable resources.
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