The Egyptian constitution, adopted in 2012, stipulated that exploitation rights of “state properties or public facilities” shall be granted by a law.  On July 3rd the Egyptian army declared the immediate suspension of Egypt’s constitution. Given this, questions emerge regarding petroleum agreements in Egypt. Is it possible to formalize petroleum concession agreements in the absence of the legislature or People’s Assembly?  Considering exploration and exploitation rights are to be issued only by a law, are parliamentary elections necessary for new petroleum agreements to be completed?

Law no. 15 of 1967 provides the legal framework to formalize new petroleum agreements. The aforementioned law authorizes the president, during exceptional circumstances, to issue decrees that have the force of law in all matters related to the security of the state. Matters related to national economy, the mobilization of human and material resources, and the support of military initiatives all fall under the heading of national security.  Undoubtedly recent political circumstances would qualify as exceptional circumstances.

Since the Egyptian petroleum sector is a vital component of the Egyptian economy, not to mention the necessity of increased oil and gas production, it is likely that concession agreements for exploration and exploitation will likely continue uninterrupted despite the absence of the legislative body.

By: Essam Taha
Attorney at Law and Petroleum Agreements Expert