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Oil and Gas in Egypt

Oil and Gas Export opportunities in Egypt

Oil and Gas is one of the most dynamic industries in Egypt, and hydrocarbon production is by far the largest single industrial activity in the country representing around 13.6% of the total GDP in 2018.

Egypt plays a vital role in international energy markets through the operations of the two Suez Canal transit points and the 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 plans to invest around $38 billion developing its petrochemicals sector over the next four years. The petrochemical sector represents about 12% of industrial production and generates revenues totaling USD 7 billion, equivalent to nearly 3% of GDP. 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.

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 specific areas through the promulgation of a “special law” by the Egyptian Parliament.

Egypt has signed around 83 oil and gas exploration deals with IOCs between November 2013 and February 2020, worth about USD 15.5 billion. It has also offered signing bonuses of more than USD 1 billion for the drilling of 319 wells. In 2020, nine petroleum agreements have been signed for oil and natural gas exploration with a minimum investment of around $452.3 in the Mediterranean and Western Desert regions.

U.S. energy giants like ExxonMobil and Chevron entered Egypt’s dynamic upstream sector in 2019 and won additional concessions in early 2020.

GOE investment in natural gas was expanded by 25% in FY 2017, adding to an expansion of 33% from the previous fiscal year. Crude oil projects did not see a similar favorable return on investment, but several multinational firms announced commitments to increase their investment to total USD 10 billion in fiscal year 2018/2019.

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