A 10-years Journey

Throughout the last ten years, the Egyptian petroleum sector has witnessed a series of successful achievements under the chairmanship of Eng. Sameh Fahmy

Although being responsible for an entire ministry is an honor in itself for its minister, but it is a heavy load, especially if it is similar to the size of the Ministry of Petroleum, followed and monitored by almost every citizen. Hence, it requires a person with unique capabilities who is able to achieve successes whenever the pressure increases.

According to the number of achievements and successes that took place during the last years, Eng. Fahmy has proved his distinguished capabilities to manage such gigantic sector.
In 1999, President Hosny Mubarak issued a verdict for appointing Fahmy as the Minister of Petroleum and being promoted from his previous position as the head of the Middle East Refineries “MIDOR”. Since then, Fahmy has attracted the President’s attention for oil in his mind for the reason that it was and still considered as a national project to achieve a breakthrough in this field.

One of the areas where Fahmy succeeded to turn into an oil and gas hub is the Governorate of Suez. Being a member in the Shura Council for this governorate, Fahmy’s most important services was setting up a shipment of petroleum products for rail and lorries outside the city in the area of Agroud, which is a subsidiary for the Oil Pipelines Company.
He also established a station for loading the butane-gas pipes in Agroud and another for the same purpose in El-Ain El-Sokhna. The minister also succeeded to protect the environment from any possible pollution resulting from the production lines; all the oil and gas pipelines were raised from ground to 15 meters above the surface in addition to developing oil platforms by lifting lines from the surface so as not to spill the petroleum products in the waters of the Gulf of Suez.

Moreover, he ordered to develop the oil tankers of oil companies operating the port of Zaitayah which are Co-operation Petroleum Company, Esso and Mobil and Caltex, in addition to developing the oil platform of Suez Oil company for producing oil to receive crude oil and the development of the port of Sadat’s oil pipeline in the Gulf of Suez and Sadat. Besides, he connected the lines of SUMED oil refineries in the Sokhna, Suez with Cairo and Assiut at a cost of about 200 million by Mitap Oil Company.

He also established the Ruhrpumpin Company for manufacturing pumps in the area of Nasr Petroleum Company in collaboration with a German company and another company, the Egyptian Petroleum HH for Rig Manufacture (EPHH), for the manufacture and maintenance of the drilling rigs in the Gulf of Suez.

Regarding his achievements in the oil sector, we find that the minister has signed several agreements for oil exploration in Egypt and has brought the world’s largest oil and gas companies to the country, which have helped to achieve many discoveries in the past ten years as well as to increase national production of crude oil.

He also developed ambitious plans for the oil sector, which contributed significantly to the sector to avoid effects of the financial crisis that has befallen other sectors; Fahmy also opened new markets and many new branches of foreign trade in the oil sector, particularly gas, which earned Egypt many of the hard currency.

The minister also successfully amended some of the exporting gas contracts regarding the previous agreements with foreign companies and introduced the amendment in both Shura Council and the People’s Assembly of Egypt, which returned to the state treasury nearly six billion pounds. He also delivered the natural gas for the South Valley and consequently reached Aswan in March 18, 2003.

The last years also witnessed the establishment of the Egyptian Natural Gas Holding Company (EGAS) and the Egyptian Chemicals Holding Company and Ganoub El Wadi Petroleum Company (GANOPE) in addition to the General Petroleum Corporation (GPC) to raise the efficiency of the sector’s performance and support it positively after it was a monopoly to the EGPC.

He also made amendments to the gas export agreements with importing countries to raise the price of natural gas, which led them to save about 20 billion pounds of the price increase.

Fahmy’s activities during the last three months
Last May, Fahmy signed an initiative for joint cooperation in the areas of research, exploration and development fields in Sinai and the Mediterranean Sea in addition to the field of personnel training with the Italian Minister of Petroleum, in which he said that Italian investments have become an important pillar of the Egyptian economy.
The minister said the signing of the initiative comes within the framework of the Italian Eni Compny sought to strengthen its presence in the Egyptian oil sector, under the direction of more investment in research, exploration and development, on the basis of the company’s confidence in the volume of Egypt’s oil and gas reserves gas, which have not been discovered yet.

The month of May was the month of the signing agreements since two new agreements were signed with two German and Polish companies.
He shed light during the signing of these two agreements on the ability and the success of the petroleum sector to attract new investments in oil and gas to major international oil companies with advanced expertise of various nationalities, including companies that work for the first time in Egypt, despite the current global crisis and credit crunch.
the two contracts which were signed between EGPC and the Polish and German companies were in the areas of Western Desert and the Mediterranean Sea, North of Edko in a total area of about 4712 square kilometers and total commitment to spend $726 million.
Furthermore, during the same month, Fahmy declared that the gold reserves located in the Egyptian mines covering are due to cover a period from 15 to 20 years, which would have a significant impact on the Egyptian national income.
Fahmy also discussed the means of cooperation with Iraq in support of the oil cooperation between the two countries when he met his Iraqi counterpart, Hussain Al-Shahristani in Iraq and signed an agreement to support the initiative of strategic cooperation, which includes the areas of research, exploration and production and allows the oil companies operating in the two countries to negotiate and direct the progress to the open bidding to search for oil and gas and development of existing fields and the participation of Egyptian companies in the tenders and the establishment of units of refineries and production, gas processing, transportation, distribution, manufacturing and marketing of equipment used in oil and gas industry.

He finished the month of May by participating in the meeting of energy ministers, held in Rome, Italy, which included the energy ministers set of eight industrialized nations and he was invited as a representative for Egypt, being one of the influential countries in the energy sector, which reflects Egypt’s role in the decisions affecting the global energy and in which he stressed the need to balance the access to energy and the environmental protection and the importance of reconciliation between the interests of all parties in the energy markets, both consumers and producers or transit countries.

As for June, he started the month by signing a cooperation protocol between the Ministry of Petroleum and the Social Fund for Development to finance the project to divert the cars to use natural gas instead of gasoline to prove what he said in the conference in Rome in which he stressed the need for a balance between access to energy and the environmental protection and also enhance the tendency of the Egyptian government to transfer 37 thousand cars to work with natural gas.
He received in the same month the approval of the Ministers Council on the 17 new oil agreements with minimum investments in each by about $3.5 billion for an English, Italian, Indian, Malaysian, Dutch, French as well as U.S. and UAE companies. In addition to that, four agreements were signed with German, Italian and Polish oil companies during the same period with investments of approximately $1.6 billion.

He also announced in June the delivery of natural gas project to Upper Egypt as a strategic economic sector, confirms the ability to implement national projects under the program of President Mubarak to improve and develop the level of services to citizens and the need to accelerate the delivery of natural gas to the cities of Aswan, Upper Egypt, even to achieve a civilized development and a large comprehensive development in all fields of social and economic level in various provinces. He said that 2009 would be a year of completing the level of natural gas. 

Fahmy met in the middle of the month the Lebanese Minister of Energy to discuss delivering the gas to Lebanon in the month of August.
On the sideline of the celebration of Environment Day held by the Bibliotheca of Alexandria, The Minister of Petroleum said in his speech that the synchronization between energy, development and environment has became a challenge for the petroleum industry, which requires intensive efforts to protect the environment and human beings from the pollution threats.

During the same month, Fahmy visited the sites of Khalda Petroleum Co in Salam area, in the Western Desert. The area, which he believes, is one of the main promising spots for the enrichment of the petroleum industry in the country.

Last July was one of the most energetic months for the Ministry, Fahmy met with his Azerbaijani counterpart Nateq Alif, who discussed the progress of implementing natural gas pipelines projects, including the one crossing the Caspian Sea to Turkemistan and Azeribijan in addition to the Nabucco Project. This latter was expected to receive the main gas supply from Shah Diniz offshore field in Azerbaijan. The two ministers tackled in their meeting the challenges facing the implementation of these projects, which enjoy a special contribution form the European Union (EU). Egypt is currently playing a key role in the European continent, as considered the promising gas provider for this area. That is the reason behind the Egyptian participation in several European summits held in Hungary, Bulgaria and the Republic of Czech and in the G8 Summit held in Italy.

At the end of the same month, the Minister headed the Egyptian delegation in the 8th Ministerial Conference of Gas Exporting Countries in Qatar, where he shed light on the vitality of strengthening the cooperation and mutual interests between gas exporting countries and the need for studying the right tools for gas pricing and for luring more investments required to develop the gas industry. Fahmy further added that there should be an exchange of expertise and latest technologies among countries.
After the second quarter of this year, Fahmy intensified his efforts to expand the ties with more countries. At the beginning of July, he met with his Uganda counterpart Hillary Onek to discuss the possible mutual cooperation between the two countries and identify the different sectors in which both countries can exchange expertise.
Fahmy’s meeting reflected his strategy to expand into the African market through the support and cooperation between the African nations, especially that they symbolize a promising market to be the base for a booming African activities worldwide.

Social Contribution and Atheletic Support
The wheel of activities led by the active minister has never been limited to the segments of exploration, discoveries, production and agreements only; however, Fahmy has never ignored the manpower behind this wheel. He has directed great attention to the services and medical insurance granted to the industry workforce. Along with the Minister of Health Dr. Hatem El-Gabaly, Fahmy follows up the implementation of a number of service projects, such as an international hospital, which will serve a large segment of the petroleum employees and their family in addition to the citizens of Suez, Sinai and Red Sea.

While in the social field, the Minister to lift the cooperative housing loan to all the workers in the oil sector of the thirty thousand to sixty thousand pounds interest-free and made another social amounted by five thousand pounds, without benefits for the marriage for the sons of workers and employees.
Moreover, Fahmy has always supported the athletic skills of the employees and adopted the gifted sporty worker. This year, the Minister celebrated the sports achievements of the petroleum employees in a celebration attended by the Minister of Manpower Aisha Abdel Hadi.

Fahmy also supported the Suez football team by more than one million pounds in addition to continuing support for the petroleum sector clubs in the national league and first division, led by Enppi and Petrojet and Asyut Petroleum and GASCO.

  • The volume of foreign investments increased in the fiscal year of 2007-2008 from $3.7 billion to $7 billion
  • Throughout 2008, the Minister had an intensified agenda; he attended the summits held in Sophia, Prague, G8, OPEC and Jeddah Energy Conference
  • One of the Minister’s prime goals is to strengthen the Arab ties through the Arab Gas Pipeline and the Liquefied Natural Gas (LNG) projects in addition to expand the operations of the Egyptian companies in the Arab world

What they say…
Eng. Emad Hamdy, CEO of Al-Waha Petroleum Company (WAPCO) said that the strategies of the Ministry of Petroleum led by Eng. Sameh Fahmy are based on four main factors:

  1. The increase of foreign investments by encouraging the foreign exploration companies and offering full support and incentives in order to boost the oil and gas reserves in the country. At the same time, the ministry has adopted the self-sufficiency policy and supports the local manufacture of tools and equipments, such as the onshore and offshore rigs, which have reduced the production costs.
  2. Setting detailed plans and time plans to implement the production and development projects top the list of priorities of the Minister. This is shown in the regular meetings and visits of Fahmy with the top officials and heads of companies to ensure the smoothness of work flow in the scheduled time frame and study any drawbacks or obstacles that might negatively affect the execution phase.
  3. The amendment of oil and gas agreements is another important factor that has contributed to ameliorating the national revenue and decreasing the costs of production.
  4. Last, but not least, solving the problems facing the industry employees has led to more efficiency at work and hence, better implementation of projects to achieve the ministry goals.

“WAPCO has a distinguished list of achievements; under the leadership of Eng. Fahmy… it succeeded to increase the daily production from 520 barrels to 850 barrels by putting old fields once back on the operation line through the utilization of advanced techniques in artificial lifting. Moreover, the company generates 40 million cubic feet of gas per month, transported to GUPCO,” said Hamdy. “We aim at reaching a net production level of 1300 barrels per day.”

Similarly, Eng. Medhat Badawy, CEO of North Bahariya Petroleum Company (NORPETCO) highlighted that “over the last 10 years, there was a considerable increase of exploration agreements and discoveries in the Western Desert, which is now competing with other areas such as the Gulf of Suez and Delta, known by their high E&P potentials.”
“Exploring new areas such as the Eastern Desert, which witnessed the first crude oil production, attracts more international companies to invest in the country,” said Badawy.
He further added, “NORPETCO and Petro Shahd succeeded to double their daily production from 4000 barrels to 8000 barrels and it is planned to increase this amount to 12000 barrels by the end of this year.”

It is worth mentioning that two discoveries were attained this year in the Southeast Shahd and Al-Zahraa area, which contributed to increase the volume of reserves to four million barrels, in the East Ras Qattara, Western Desert. Moreover, the construction of a new station for production facilities in Southeast Shahd was completed.
Badawy suggested increasing the construction of production facilities stations in the Western Desert in order to accommodate the new discoveries and put them on production line in a short period of time.

One of the significant landmarks of the Minister is the establishment of Joint Ventures. “Lots of JVs were established since the beginning of Fahmy’s leadership. Our company is one of these JVs, which was established in the second quarter of 2002, jointly between the Egyptian Natural Gas Holding Company and Canadian Centurion,” said Mohamed Moenes Shahat, President of Al-Wastani Petroleum Company.

He further added that the actual production of the company started on March 31, 2002 from the Al-Wastani field at the rate of 12 million cubic feet of gas per day and 400 barrels of condensate.

Eng. Magdy Abdallah, CEO of Gemsa Petroleum Company (GEMPETCO) established in April 1989 said, “Under the leadership of Eng. Fahmy, GEMPETCO has implemented several projects and achieved many accomplishments, such as the renovation of electric deep plumbs to ensure production increase, fixation of wells at Gemsa Field and water injection, utilization of secondary production techniques in old fields to re-generate production, maintenance and operation of Zaafarana petroleum tanker, extending the Gemsa offshore platform to accommodate larger number of wells (instead of constructing new platforms to save costs) and finally, the utilization of GEMPETCO’s extra production facilities by Fanar Petroleum Company in the Southwest Gabal El-Zeit field to help decrease the production costs.”

Abdallah clarified that the human resources development has been on the list of top priorities for the company, which is one of Fahmy’s strategies aiming at strengthening the skills and expertise of the Egyptian manpower that would by their turn develop the sector.

List of some Joint Arab Projects

  1. Sharara/Melita Pipelines, Libya (Petrojet and Enppi)
  2. Serir/Tabrak Pipeline, Libya
  3. $10-million Pipeline for Oil Exportation to Sudan (Petrojet and Enppi)
  4. Water feeding grid and drainage network in Yemen, worth 10 million Euros investment (Petrojet)
  5. Infrastructure project for gas liquefaction in Yemen (Petrojet)
  6. Construction of crude oil treatment station in Yemen, worth $152 million (Petrojet and Enppi)
  7. Complete technical services and supervision for the construction of Euphrates Company, Syria (Enppi)
  8. Development Project to raise the efficiency of production at the fields of Thuban/Gronof, Azrak/Maleh, Syria (Enppi)
  9. Construction of two units for the recovery of gases generated in the stores of raw, Syria (Enppi)
  10. Preparation of basic engineering studies for the fields of Gehar Area, Syria (Enppi)
  11. Completion of the pilot project conducted by Car Gas to convert vehicles to run by natural gas, Syria
  12. Feeding line for the Errachidia factory, Jordan (Petrojet)
  13. Implementation of 42 storage tanks, Jordan (Petrojet)
  14. Construction of Potash Production Unit, Jordan (Petrojet)
  15. Projects of compressed natural gas stations and centers to convert vehicles to run by natural gas in a number of Arab and African countries
  16. Transportation, marketing and delivery projects in Syria and Jordan
  17. Expansion of the Egyptian Drilling Company (EDC) activities in Saudi Arabia, Syria and Libya
  18. Installation and manufacture loading platform for petroleum products in Dabaa, Saudi Arabia (Petrojet, Marine Petroleum Services and Sianco)
  19. Expansion of gas stations in Yanbu, Saudi Arabia (Petrojet and Enppi)
  20. Construction of liquefied gas storage reservoirs in Yanbu (Petrojet and Enppi)
  21. Rehabilitation project for the fields of Svania, Berry, Morgan, worth $107 million, Saudi Arabia
  22. Field development project for the Khafegy field, Arabian Gulf, 1st phase, $722 million
  23. Petroleum Air Services Company won the international bid round of the Libyan Oil Aviation Company
  24. Al-Hamra/Skikda pipeline projects, Algeria

By Tamer Abdel Aziz


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