During the first decade of this century, the Egyptian Petroleum Industry record was full of numerous distinctive landmarks that place it in line with other major counterparts worldwide. These significant outcomes have confirmed the success of first integrated, defined strategy that was set upon scientific planning, at the beginning of this century, in January 2000

Starting with the agreements and contracts, the strategy of Petroleum agreements was significantly developed, which have attracted the interest of major companies to operate in Egypt for the first time. Due to the modifications made, some corporations have even resumed their businesses and returned once back to the country.

Over the period from the fiscal year of 1999-2000 to 2009-2010, a total of 176 petroleum agreements and amendments were inked. No doubt, the positivity of these agreements will be reflected through the results of the added volumes of reserves, fields development plans and production rates increase, which is a strategic asset for future generations in the presence of secured energy resources.

As a result, upstream plans were developed and exploration acreages were intensified all over Egypt, especially in the deep waters of the Mediterranean Sea and the Red Sea, along with applying modern techniques in the field of seismic survey.  Hence, the Petroleum Sector achieved 489 discoveries in the regions of the Mediterranean Sea, the Gulf of Suez, Sinai, Eastern and Western Deserts, Delta and Upper Egypt, out of which, 311 discoveries were crude oil, while the remaining 178 were natural gas discoveries. These achievements have considerably contributed to increasing proven reserves of natural gas and crude oil.

Oil and Natural Gas Reserves
The Total proven reserves of crude oil, condensates and natural gas increased from approximately 11.8 billion barrels equivalent in 1999/2000 to about 18.4 billion barrels equivalent to date, of which 4.47 billion barrels are of crude oil and condensates and 78.1 trillion cubic feet of natural gas, compared to 3.7 billion barrels of crude oil and condensates and 44.9 trillion cubic feet of natural gas in 1999/2000. This is the highest volume of reserves achieved in the history of the petroleum sector in Egypt.

Rates of petroleum production
The total production of crude oil, condensates and natural gas jumped from about 1.1 million barrels equivalent per day in 1999/2000 to 1.9 million barrels of oil equivalent per day, in 2009/2010. Throughout this period of time, the natural gas production increased three folds, as a result of putting new fields on stream and applying state – of – the art technologies in addition to the rapid development of new discoveries.

Refining and Manufacturing
The Petroleum Sector has adopted flexible policies to keep pace with contemporary changes that would in return encourage investors of technical expertise to participate in the establishment of oil projects and refineries. Such projects provide petroleum products that are directed for the domestic market and for exportation means as well. A memorandum of understanding was recently signed with China to build a joint refinery, which is the largest in the history of Egypt. In addition, continuous completion of crude oil and products pipelines are being supported and developed, as well as bolstering storage tanks capacities whether in production or consumption areas.
The refining capacity witnessed a great development, which rose from 29.5 million tons in 1999/2000 to reach 37 million tons at the present time.

Expansion in Natural Gas Utilization
The early years of the 21st century witnessed a boom in the implementation of natural gas delivery projects to Egypt’s governorates. The total number of residential units, supplied with gas, since 1981 until August 2010 was about 3.9 million units at various governorates; of which about 2.9 million were added during the period from 2000 to August 2010 compared to one million residential units, during the period 1981 – 2000.

This is in addition to about 1522 plants, 37 power plants and about 7766 commercial consumers. In the domain of establishing and developing of natural gas car fuelling stations, the number of natural gas conversion and fuelling stations increased to 129, and the number of vehicles converted to natural gas reached about 137.6 thousand up till June 2010.

Upper Egypt Gas Pipeline…A Qualitative and Developmental Leap for the South
The Petroleum Sector succeeded in completing the implementation of Upper Egypt Gas Pipeline Project, which extends from Dahshur in the north to Aswan in the south, with a total length of about 930 kilometers. The project is considered the longest of the National Gas Grid in Egypt, with a total cost of L.E.5.7 billion. The project will serve as the main artery of energy that will attract Egyptian, Arab and foreign investments to Upper Egypt governorates to contribute to achieving the optimal economic monetization of their natural resources.

Natural Gas leads the development drive in Sinai
There is no doubt that the delivery of gas to Sinai represents a cornerstone for developing this vital area. It has contributed to the reconstruction of Sinai and the implementation of many projects.
Sinai Gas Company was founded to speed up the delivery of natural gas to North and South Sinai governorates, providing a clean energy source for power plants, factories, tourist facilities and houses.

Petrochemical industry on the development agenda
In the framework set by the Ministry of Petroleum, a national plan is set for the petrochemical industry, to be implemented during the coming 20 years. This plan aims at achieving the maximum utilization of available and probable potentials of gas reserves and infrastructure, as well as achieving self-sufficiency of petrochemical products besides exporting abroad.
The implementation of the first phase projects has already started, with approximate investments of $5 billion.
During the fiscal year of 2011-2012, the remaining projects of the first phase will be placed on the production map, including polystyrene, ammonia urea and polyester projects. By terminating the first phase, the implementation of second phase projects will take place, with estimated investments of about $8 billion, which carry the target of satisfying the domestic demand, while exporting the surplus.

Oil Exports
The Petroleum Sector strategy aims at maximizing the oil revenues to achieve a surplus in the petroleum balance of trade by increasing the quantity as well as the value of exports with diversification to include crude oil, high quality petroleum and petrochemical products, in addition to natural gas. During the period from 1999/2000 to 2009/2010, the value of total exports reached about $82 billion.

Natural Gas Exports
The launch of greatest national strategic projects to export gas for the first time in Egypt marked the beginning of this century, which represents a qualitative leap of the best economic monetization of Egypt’s natural gas resources & a way to support the Petroleum Sector balance of foreign exchange. There is no doubt that, the decision to export Egyptian natural gas helped to stimulate foreign companies to intensify exploration, particularly in  the deep water due to the presence of outlet terminals to market the produced gas after satisfying the domestic market requirements, resulting in production rates & reserves  increment,  achieving a major development.
Also, natural gas export earnings, contributed to increasing the Egypt’s outcome of foreign currency, along with the active participation in achieving an overall economic development for the State.

Arab Gas Pipeline
The Arab Gas Pipeline is one of the most important regional Arab cooperation projects in the natural gas industry, which has been implemented in the first decade of this century. For the first time in the history of Egypt, natural gas reached Jordan, Syria and Lebanon, marking Egypt joining the club of gas exporting countries worldwide.
The Arab Gas Pipeline is one of the main energy arteries, feeding Europe after linking it to the European gas networks. 

Natural Gas Liquefaction and Export Projects
The Petroleum Sector managed to implement the first two LNG export plants. The first one was established in Damietta, with investments of $1.3 billion, and its first shipment was exported in January 2005 to the USA, Korea, and Mexico. The second plant is held in Idku where it consists of two liquefaction units; the 1st unit exports started in May 2005, to Spain, Greece, Mexico,
India, France and Japan, while the second unit export was launched in September 2005, to Spain, France, USA, Japan, Korea, India, Taiwan and Turkey.

Petroleum Investments
The availability of political, economic and investment stability, currently witnessed in Egypt under the leadership of President Mohamed Hosni Mubarak, has enhanced Egypt’s position as a producer and exporter of oil and natural gas, which in turn resulted in Egypt’s acquiring the most significant factor for attracting international investments. Moreover, Egypt is regarded as a source of energy supply and a reliable transit country as well and enjoys the necessary elements to become a regional energy hub, supported by its proximity to energy resources and markets. Also, Egypt enjoys adequate natural gas reserves and the necessary infrastructure and facilities, needed for the gas export projects such as the three major projects to export liquefied natural gas.

During the period 1999/2000 – 2009/2010, the total foreign investments in exploration and development, reached about $35 billion. The influx of foreign investments is due to the high oil potential in Egypt, which is supported and confirmed by global reports and studies. According to the latest report of the U.S. Geological Survey (USGS), the Nile Delta and Mediterranean Sea regions contain undiscovered natural gas reserves of about 223 trillion cubic feet, in addition to undiscovered crude oil and condensates reserves of 7.6 billion barrels.

The Petroleum Sector succeeded in signing various petroleum agreements, the most important of which is the agreement signed at the beginning of 2009 with the Italian Edison to involve a production sharing partner in Abu Qir offshore fields, achieving the highest record of foreign investments at this significant time reaching over $3 billion, of which $1.4 billion signature bonus and the remaining are investments over several years for the development of the Abu Qir offshore area. This agreement will be recorded in the history of the Petroleum Sector as the most significant petroleum agreement that will contribute to bolstering and increasing Egypt’s natural gas reserves and production.

A Strategic Framework Agreement for the development of joint initiatives in the fields of exploration, production and transportation of hydrocarbons was signed, on 27/7/2010, by Eng. Sameh Fahmy, Minister of Petroleum, and ENI’s CEO Paolo Scaroni, in the Italian city, Milan.This strategic framework agreement of cooperation comes within the context of carrying out the cooperation initiative, signed during the Italian-Egyptian Summit, which took place in May 2009, Sharm el-Sheikh, and was headed by President Mubarak and the Italian Prime Minister, Silvio Berlusconi, to promote cooperation between the two countries in the field of development.

The Strategic Framework Agreement provides a joint cooperation initiative in the Mediterranean region, outside the Egyptian borders throughout a partnership between the Egyptian Petroleum Sector and the Italian Corporation Eni, to mutually exchange information among the parties and joint studies to pursue common projects in oil and gas domains. The Agreement also provides the participation of the Petroleum Sector in Eni’s upstream activities in the development of petroleum concession areas in Iraq and Gabon.

Moreover, the cooperation agreement includes allowing the opportunity for Eni, to use the gas transportation capacity in the Arab Gas Pipeline system, in coordination with the other countries involved in the Pipeline and in accordance with the agreed upon measures, where Egypt presently exports gas to Jordan, Syria and Lebanon and which may be expanded and interconnected to other gas transport systems in the coming period to transport natural gas, particularly from Iraq.

Given that, the Arab Gas Pipeline is a strategic line and one of the most significant regional pipelines along with allowing the necessary flexibility to exchange as well as transfer quantities of natural gas, currently and in the future.

It also signed two petroleum amendments between the Egyptian General Petroleum Corporation (EGPC) and the British Company BP & the German RWE Dea, in North Alexandria and the west Mediterranean deepwater to develop estimated reserves, at about 5 trillion cubic feet of gas and 55 million barrels of condensate contributing to securing daily gas production supplies for the domestic market. First gas is expected in October 2014, at an estimated average of 900 million cubic feet per day and 10 thousand barrels of condensates per day. The amendment of the agreements includes conditions that guaranteed Egypt great advantages, particularly with the risks of development in the Mediterranean deep waters concession area, due to high pressure and temperature. In addition, the foreign partners will take upon all the needed investments for the development, which are about $ 9 billion, without any cost-recovery. This agreement unlocks a new phase in realizing the huge potential of the Nile Delta basin, which will play an important role in meeting regional & domestic energy security needs in the coming decades.

The Agreement is regarded as the biggest single investment in the upstream field to date, as the project will be supported with the necessary technical expertise, in addition to the deployment of leading-edge technologies.

The success of the Petroleum Sector in attracting foreign investments was represented in the successful conclusion of 17 new petroleum agreements and amendments during 2009 / 2010 with investments of about $ 3.3 billion in various regions of Egypt. Foreign investment in exploration, development and operation domains during the same year reached about    $ 7.7 billion.

However, there are large available opportunities on a large-scale for investment in other areas of the petroleum industry including; refining, petrochemicals and gas liquefaction & processing petroleum equipment projects, in addition to the promising domain of Mineral Resources, which represents a new and important area to attract investment.

The Egyptian Petroleum  Contracting Companies Start to Work Abroad
The early years of the 21st century, witnessed the expansion in the activities of Egyptian Petroleum Contractors, i.e. Petrojet-ENPPI – PMS – Gasco – EDC – CarGas – GasCool – SanMisr, to operate in the Arab, African & Latin American countries in spite of the competition with major international companies. The value of the work carried out abroad reached, about $5.1 billion for the implementation of projects in 14 countries, which contributed to increasing the presence of Egypt and its ability to compete in the labor market abroad.

Local Manufacturing
One of the most significant landmarks in the history of the modern Egyptian petroleum industry, is the Petroleum Sector tendency to maximize and deepen local manufacturing throughout increasing the manufacturing capacity in the production workshops of the Petroleum Sector companies to encourage domestic production and reduce import along with rationalizing foreign currency utilization to maximize the surplus and achieve optimum monetization of natural resources along with maximizing the added value & provide new job opportunities for youth  as well as the transfer and adaptation of the world’s latest technologies. 

The Petroleum Sector, also, entered the domain of manufacturing onshore and offshore drilling rigs due to its significance in maximizing the oil resources in light of the expansion and intensification of oil and gas exploration. The Petroleum Sector managed to manufacture of the first onshore oil rig (Mubarak -1) at the end of 2007. Mubarak -1 rig started operation in the concession area of northwest Gemsa in the Eastern Desert for Vegas Co. and achieved 2 oil discoveries in the Eastern Desert in the first two wells drilled for the Greek Vegas Company, followed by the production of another 4 oil rigs.  Egypt also entered strongly, for the first time, in the field of manufacturing offshore rigs in cooperation with China and Japan; it has been prepared to manufacture 5 offshore rigs. The first factory for the manufacture of oil and gas pumps, which is the first of its kind in Egypt and the Middle East, was established in Suez in participation with the German Ruhrpumpen Co… Oil extraction absorbent and compressing pumps were manufactured for the first time in Egypt in participation with Lafkin International Company, in addition to establishing the first factory for the production of pipes and drilling caissons in the Gulf of Suez, at Ain Sukhna using the latest Japanese and Chinese technologies.

Development of Upper Egypt Areas
The Petroleum Sector increasingly prioritizes the development of Upper Egypt areas to bring about overall development to raise the standard of living of citizens. The most important measures that were taken in this regard are the establishment of an independent structure to carry out all petroleum activities in Upper Egypt, Ganoub Al Wadi Petroleum Holding Company. Since its establishment in 2003, the company managed to intensify its efforts to achieve comprehensive development in Upper Egypt in all petroleum activities and was able to achieve first oil discovery there, i.e. Al Baraka-1, which was put on stream at the end of 2007, followed by Al Baraka – 2, 3, 4,6. This is considered a strong breakthrough and a new phase in the history of the Egyptian oil industry and Upper Egypt, as a promising area on the map of petroleum production in Egypt. It also encourages the continuous intensification of oil exploration in other areas in the south and attracts more international companies.

Mineral Resources: New Vision for a Better Future
Mineral Resources Sector has witnessed achieving many successes, since transferring its affiliation to the Ministry of Petroleum in October 2004. The most important of which are completing preparation of the first integrated strategy for the Mineral Resources in Egypt for the next 25 years, and the new mineral resources draft law aiming at setting a new legal framework for the Mineral Resources activity that attracts investments and provides local industry needs of the mineral raw materials, in addition to erecting industrial projects depending on these available raw materials, that leads to the increment of Egypt’s revenues.

The first integrated plant at Mubarak complex for the production of gold, silver and copper at Al Sukkari region was established representing an industrial, technological and economic leap in the gold industry in Egypt, and a serious beginning to join gold producers in the world extensively during the coming years. Moreover, the mine’s production also includes silver and copper which raises the economic value of the project. Total production, since startup in January 2010 until 2nd of October 2010, is about 3.4 tons, and according to the production plan, it’s expected to produce about 5-6 tons of gold from Al Sukkari mine during 2010, which exceeds what was produced in Egypt over the last century (7 tons).

In addition, production continued from Hemsh mine at the Eastern Desert, which witnessed production of the first gold bar in April 2007 after a halt of more than 50 years. Gold regular commercial production, since its start up, in January 2008 till now reached about 100 kilograms.
Currently, the construction of an integrated global city for gold industry in Marsa Alam is under study, with investments estimated of about $500 million, with the participation of Egyptian, Arab and foreign investors to produce the final gold jewellery.
Preparation of establishing the first database for mineral resources in Egypt is currently underway, as the first specialized center for information in this domain.

In the framework of the Ministry of Petroleum contribution to the development of Sinai regions, a plan for establishing an industrial, mining complex has been completed, and it is planned to offer a bid round for the exploitation of coal mines in Al Maghara area at Sinai, which includes proven reserves of about 25 million tons, that will help to develop the Sinai region.

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