Egypt is implementing an integrated program in cooperation with major international companies to explore for oil and gas, as part of its strategic plan to benefit from its natural resources and become a regional center for energy trade.
In this context, Petroleum Minister Tarek El-Molla revealed that his country has begun implementing an ambitious program in cooperation with major international companies (Italian Eni, Chevron, ExxonMobil, Shell and BP) to drill 35 exploratory wells for gas exploration in the Mediterranean and the Nile Delta within two years from now until July. July 2025.
He said that the total new oil and gas exploration investments for these wells are estimated at about $1.8 billion, with 21 wells during the current fiscal year (started on July 1) 2023-2024, and about 14 wells during the fiscal year 2024-2025.
Oil and gas discoveries in Egypt
Al-Mulla said that his country is currently working on developing the “Nargis, Satis and Nour” fields in the Mediterranean and east of Damanhur in the Nile Delta, and “Framed and Al-Obeid” in the Western Desert, as these discoveries represent an important addition to the production of oil wealth in Egypt.
The Minister of Petroleum added that during the past 5 years, the Egyptian oil sector and international companies drilled 576 exploratory wells, and as a result, 284 new oil and gas discoveries were made, with 217 oil discoveries and 67 gas discoveries.
He pointed out that the new oil discoveries added reserves amounting to 1.32 billion barrels of oil equivalent, with 295 million barrels of crude oil and condensate, and 5.75 trillion cubic feet of gas.
He explained that the oil and gas discoveries in Egypt contributed – in light of the rapid plans to put them on the production map – in maintaining production rates and facing the natural decrease in it.
Egypt’s production of oil and gas
El-Molla said that oil and natural gas resources constitute about 93% of primary energy sources in Egypt, and oil and gas production meets about 75% of domestic consumption, and the rest of the needs are met through external imports.
El-Molla stressed that natural gas is currently the most important fuel and the most consumed in the energy mix in Egypt, as it is a clean transitional fuel that Egypt has adopted as a major choice in the energy mix for its domestic consumption, as it is the least dense fossil fuel in terms of carbon emissions.
Egypt’s oil sector production of oil wealth recorded about 97.5 million tons in 2022. In contrast, Egypt’s consumption of petroleum products increased to 81 million tons, at an annual rate of 6.2%.
Production included 27.8 million tons of crude oil and condensate, about 50.6 million tons of natural gas, and 1.1 million tons of butane gas during 2022.
While the consumed amount included about 35.5 million tons of oil products and 45.6 million tons of natural gas, according to the data seen by the energy platform.
The following infographic, prepared by the specialized energy platform, reviews the most prominent figures for the Egyptian oil sector in 2022:
Oil prices
The Egyptian Minister of Petroleum said that the decision of some OPEC + countries to extend the voluntary cut until the end of 2024 comes within the framework of the active role of OPEC and cooperation with producers outside it under the umbrella of the “OPEC +” alliance in supporting stability and balance in the market in the interest of producers and consumers through decisions that constantly respond to What happens to the market in terms of variables and dynamics of supply and demand.
He pointed out that there are a number of factors affecting the determination of crude oil prices, for example; Supply from OPEC countries, supply from countries outside the organization, demand from major consuming countries or the rest of the world, inventory levels in importing countries, the state of global financial markets, and the price of the dollar because it is the strongest currency in the world and on the basis of which the price of oil is determined, often when the “dollar price” rises against other currencies Oil prices fall.
He added that determining the trends of crude oil prices in global markets depends on the clarity of the picture for some factors that are characterized by a high degree of uncertainty, such as the expectations of global economic growth, the expectations of the growth of the Chinese economy, the largest oil consumer in the world, and the risks of recession in the United States and the European Union, as it faces the expectations of the oil market. In the short term, there are many counter trends on both the demand and supply sides in the form of recession fears and supply shortages with the continuing repercussions of the Ukrainian crisis.
He pointed out that although the recovery of the Chinese economy supports the growth of global demand for oil, the continuing fears of slowing economic growth with high interest rates and accelerating inflation cause a state of uncertainty, as there are still persistent concerns about slowing economic growth rates in the main regions of the world. In the world, markets prevail, offset by factors that drive oil prices upward, such as the lack of expansion in US oil production and the low levels of excess energy among OPEC members.
He said that it is expected, in light of the existing data, that oil prices will continue to fluctuate at levels ranging from more than 70 dollars per barrel to about 80 dollars per barrel.
renewable energy in Egypt
The Egyptian Minister of Petroleum said that his country had recently decided that the percentage of energy generated from new and renewable sources in the energy mix for the electricity sector would be 42% by 2030 instead of 2035, and the amendment came within the framework of affirming Egypt’s commitments to confronting climate changes, especially after organizing the COP 27 climate summit. .
El-Molla added that Egypt is currently updating its integrated and sustainable energy strategy until 2040 in light of the increase in the contribution of new and renewable energy and the transition to a green economy with the introduction of the use of hydrogen as a clean source of energy, especially in light of Egypt’s competitive advantage to expand the production of new energy and hydrogen.
He explained that the first national strategy for the exploitation of hydrogen is currently being completed, and Egyptian and international partnerships have been launched in this field, including the strategic partnership with the European Union during the Climate Summit, as well as the agreement between Egypt and Germany for cooperation in this field, and we have also launched projects mediated by the oil and gas sector to produce Hydrogen derivatives from ammonia and green methanol in cooperation with Skatek International.
He added that the economic reforms implemented by Egypt enabled it to review the energy mix and increase the percentage of new and renewable energies in it, especially as it has a diverse infrastructure and a distinguished geographical location, which qualifies it to become one of the largest producers of green energies in the region.
He pointed out that Egypt signed, during the COP 27 climate summit, about 23 memorandums of understanding for green hydrogen projects and its derivatives, including 9 framework agreements with major international companies, with a total investment of $80 billion.
Oil sector strategy in Egypt
El-Molla said that the Egyptian oil sector is one of the most important economic sectors in the country, which mainly contributes to advancing development, and adopts a comprehensive vision to achieve optimal economic utilization of all potentials and natural resources, to contribute to the sustainable development of Egypt and enhance Egypt’s role as a regional energy hub. And for the oil sector to become a role model for the rest of the state’s sectors in terms of modernization and development.
He added that in order to implement the vision, the oil sector in Egypt is working on an integrated strategy that includes 3 main axes, including:
- Securing energy sources, by increasing supplies, managing energy demand, and diversifying its sources.
- Achieving financial sustainability and maximizing the added value of Egypt’s oil and gas resources.
- Promoting optimal management methods for the sector by improving governance systems, organizational structure, investing in human resources, and providing a suitable environment for increasing investments in the sector.
He pointed out that in order to translate the strategy into tangible results, work is being done on several axes in the various activities of the value chain of the oil and gas industry in Egypt. New foreign investments through marketing new and promising areas through the digital portal of Egypt for Exploration and Production and the exploitation of advanced technology to increase production in outdated areas and fields such as the Gulf of Suez.
He added that work is underway to increase the success rates of search and exploration operations by taking advantage of the drilling results in developing geological visualizations for drilling operations.
He explained that the networks of crude, gas and oil derivatives transportation lines are being expanded, and oil ports and marine shipping centers are being developed, to increase shipping capacities and raise absorption efficiency, in addition to increasing storage capacities for oil products.
He stressed that this comes within the framework of strengthening Egypt’s pivotal role as a regional energy hub, by maximizing the utilization of the advanced infrastructure of the oil sector, and receiving more gas from the eastern Mediterranean region for re-export to meet the growing demand of European markets for energy.
Refining and petrochemical sector
Al-Mulla explained that in refining activities, the sector will continue to implement projects to increase refining capacity, develop and raise the efficiency of existing refineries by adding new manufacturing processes to convert low-value products into high-value products, in a way that supports the sector’s plan and objectives to cover the needs of the local market for the main products, “diesel-gasoline.” “.
He said, “The new refinery projects that are being implemented will contribute to increasing the domestic production of diesel and gasoline and reducing their imports, in a way that supports securing local needs of oil derivatives and meeting them.
He added that in the field of the petrochemical industry, which is one of the most important ways to increase the added value of local oil and gas resources, a package of new projects will be implemented, such as the production of soda ash and metallic silicon, which will help meet the needs of the local market for specialized petrochemical products and limit imports, in a manner that enhances The contribution of the oil sector to supporting the national economy and expanding the establishment of integrated industrial complexes, as well as supporting the process of technology transfer and localization in line with the directions of the Egyptian state.
El-Molla stressed that reducing emissions and promoting the transition to sustainable and low-carbon energy systems is one of the main elements in the vision and strategy of the oil sector in Egypt, as it works on a number of main axes to achieve emissions reduction and energy transition, which includes considering natural gas as the first choice as a fuel, especially in the stage Switch to low carbon sources and improve energy efficiency.
Work is also underway to implement projects to remove carbon and put in place the appropriate institutional framework to enhance the sector’s efforts in this field and to expand the production of green petrochemicals and the exploitation of renewable energy in various sites and production facilities, as well as the production of low-carbon hydrogen.
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