EGYPS 2019 Witnesses Key Investment Agreements

EGYPS 2019 Witnesses Key Investment Agreements

The third edition of the Egypt Petroleum Show (EGYPS 2019), held on February 11-13 at the Egypt International Exhibition Center in Cairo, celebrated the achievements of the Egyptian oil and gas sector and enabled new partnerships in the country and the region. The Show, organized by dmg events under the high patronage of President Abdel Fattah El Sisi, is the largest oil and gas event in North Africa and the Mediterranean, and promotes Egypt’s journey towards becoming a regional energy hub.

This year, EGYPS Exhibition saw an increased number of participants, with 400 exhibiting companies in an area spanning over 28,000 square meters, with 13 country pavilions representing Bahrain, Cyprus, Canada, China, France, Germany, Italy, Norway, Russia, Scotland, UAE, UK, and the US. As much as 20,000 people attended the event.

Decision makers, experts, and industry leaders discussed across multiple sessions and roundtables the challenges and developments of the region’s economies and energy scene, with around 200 expert speakers, and more than 1,200 conference delegates.

Besides the Strategic and Technical Conferences, as well as the Finance and Investment Briefings, Petroleum Club, and the Women in Energy Conference and Awards, EGYPS brought new features for this edition: the HSE in Energy and the Security in Energy forums, Technical Papers’ Poster Display, HSE Excellence in Energy Award, in addition to the Global Meetings Program, the Digitalization Zone, and the Youth Engagement Program.

Oil and Gas Sector Playing a Vital Role in Egypt’s Economy

Prime Minister Moustafa Madbouly delivered a speech during the Show’s opening ceremony commenting on the government’s aspirations to implement projects that add value to the economy, foster growth, and attract more investments, with the oil and gas sector being the main engine of development.

The Prime Minister praised the Ministry of Petroleum’s cooperation with international oil companies (IOCs) to develop infrastructure and comprehensive development plans. He also noted that the sector is a cornerstone in Egypt’s economic and social development because of its role in pushing the wheel of production and supplying the economic and development projects with the needed energy resources. Therefore, the Egyptian government has given priority to create an attractive investment strategy and transform the challenges into investment opportunities.

“The oil and gas sector has achieved unprecedent achievements in the recent years in several fields, foremost of which is the end of the gas import era and the fulfillment of the contractual obligations for export, which was achieved as a result of the completion of development projects and production of natural gas, especially the major gas fields in the Mediterranean Sea,” said the Prime Minister.

Egypt’s Minister of Petroleum and Mineral Resources, Tarek El Molla, also delivered a speech in which he thanked President Abdel Fattah El Sisi for his patronage and continuous support to the sector, noting that over the past two years, a new strategy was implemented to attract more foreign investments.

“The efforts of several government agencies and the restoration of the confidence of our partners from international oil companies (IOCs) through the reduction of arrears by more than 80%, are reflected by [IOCs’] continues effort and increase of investments in the past period,” he said.

Commenting on the sector’s most recent achievements, El Molla announced that natural gas production from the Giza and Fayoum fields, which represent the second stage of the Nile Delta project, currently stand at 400 million cubic feet per day (mcf/d). Production from the fields will gradually increase to 700 mcf/d by April, he indicated.

The minister also referred to the progress in seismic surveys in the Gulf of Suez, and the tender for the Egyptian exploration portal, which will electronically market various petroleum areas to facilitate access to data and encourage E&P; in addition to the developments in product distribution and the completion of designing three main phases in Badr El-Din development, which will have its pilot phase launched in Q2 2019. El Molla also noted that 2018 saw a new record in delivering natural gas to more than a million households.

Keynote speaker, Secretary General of the Organization of the Petroleum Exporting Countries (OPEC) Mohammed Sanusi Barkindo stressed Egypt’s role and contributions to the oil and gas industry and market stability.

Secretary General of the African Petroleum Producers Organization (APPO), Mahaman Laouan Gaya, said that Egypt plays an integral part in achieving integration and unity among African countries.

Bid Round Winners for New Concessions

On the second day of the Show, minister Tarek El Molla announced the winners of last year’s bid rounds alongside the Egyptian General Petroleum Corporation (EGPC) CEO Abed Ezz El Regal, and the head of Egyptian Natural Gas Holding Company (EGAS), Osama El Bakly.

EGAS signed agreements worth $70.45 million to drill 39 wells in the Western Desert with investments of $164.5 million. The General Petroleum Company (GPC) was awarded a $5 million contract to drill 10 wells, while Neptune Energy obtained an $11 million deal to drill three wells with a total volume of investments at $34.5 million.

Shell Egypt won three bids: the first one in Faiyum for $24.7 million to drill six wells; the second one for five wells in the southern east of Horus for $24.7 million; and the third one for $7.8 million for three wells in Abu Sinan.

IEOC Production BV won the bid round for South East Siwa to drill four wells with $17 million investments and $1.15 million signing bonus. Exxonmobil, BP, IEOC, Total, Shell and Petronas were awarded exploration rights in District 3 in North East Amereya Offshore to drill two wells with a $100 million commitment and $10 million signing bonus.

BG and Petronas won the bid round for District 4 in Sidi Gaber offshore area to drill one well and conduct seismic survey on 1,500 square kilometers, with $60 million commitment and $10 million signing bonus. The two companies further won the bid round for District 6 in North Al Fanar Offshore to conduct a seismic survey on 2,250 square kilometers, with $9 million commitment and $3 million signing bonus.

DEA won exploration rights for District 10 in East Damanhour onshore concession to drill seven wells, with $28 million commitment and $11 million signing bonus.

Agreements Strengthen Development and Cooperation Plans

Several memoranda of understanding (MoUs) were signed during EGYPS. The Ministry of Petroleum signed an agreement with Apache Egypt to support the efforts to qualify young calibers and medium-level managers with a program to prepare new leaders. A related agreement was inked with the American Chamber of Commerce to support the training program sponsored by Apache, with the first phase seeing 50 trainees chosen by the ministry.

“We know that for any industry to be successful, especially in Egypt, as it is going through an economic reform and transformation, one of the most important things is capacity building. We want to make sure that we educate people and develop the right skill set to make them productive,” David Chi, Regional Vice President and General Manager of Apache, told Egypt Oil & Gas. “We provide the tangible skills that the youth and the middle management need,” Chi added, noting that companies will see cooperation from universities from both Egypt and the US.

Egyptian Petroleum Company (EPC) and Malaysia’s Petronas agreed to exploit surplus capacity at the oil complex in Al-Ameriya. ENPI and SAP signed a cooperation agreement to implement an integrated asset and resource management system for the downstream sector. In addition, Schlumberger and the Egyptian Drilling Company (EDC) also signed a MoU to utilize the sector’s human capital with a qualified and capable workforce by designing a customized training program as part of the People Development pillar of the ministry’s Modernization Project, in collaboration with the Society of Petroleum Engineers (SPE).

Commenting on the health, safety, and environment (HSE) front of the agreement, Karim Badawi, the Managing Director for Egypt and East Mediterranean at Schlumbeger told Egypt Oil & Gas that the company has worked with representatives of different companies, such as EDC, Apache, BP, Eni, EGPC, Petrojet and HSE experts. Putting together the collective effort of all involved parties to help the industry in terms of improving the HSE culture, and leveraging the best practices on the inclusion of safety performances and safety culture.

Strong International Attendance Seen in Exhibition Halls

Alongside the usual household names, many companies were seen on the floors of EGYPS for the first time, such as Hempel Group. “It is a major event with the biggest companies in the field. We came here to explore more opportunities for business, as part of our new strategy,” said Mina Lawindy the company’s Sales Manager for Egypt, Libya, and Sudan.

Attendees expressed general positive views regarding the event and major exhibiting companies praised the organization and the role played by the Show. “EGYPS is a one-stop shop for us where we can show and demonstrate for our clients what we could do and what we have done,” said Saad Saud Al Akeel, ARGAS CEO.

“This year has been phenomenal in terms of attendees, programs, and also partners from outside the continent,” added Ibrahim Sagna, Global Head Advisory at Afrixham Bank.

For Maria Moraeus Hanssen, DEA CEO, Egypt is perfectly situated to become a regional energy hub, a position that EGYPS helps to highlight. “I think this is an excellent opportunity for Egypt to really show itself off. You see a very active government and a very active minister who want Egypt to be a key player in the oil and gas market,” she stated.

“We found a huge change from last year to this year in terms of standards and quality of content tackled by the panels. We met leaders in the industry and government officials, so it was really encouraging,” Ali Al Jarwan, Dragon Oil CEO, also commented.

For many IOCs, Egypt represents a very attractive investment destination. “Egypt is a hugely interesting market. This is a country that has got significant resources,” Nick Boyle, CEO Lightsource BP, said.

“Egypt is a backbone for Kuwait Energy. The start of our company was in Egypt and most of our production comes from Egypt. Hence, most of our profits come from the country,” said Kamel Al-Sawi, Kuwait Energy CEO.

The call for papers for the fourth edition of EGYPS, confirmed for 2020, is already open. To speak at the Technical Conference, oil and gas experts should submit their papers by June 27, 2019. EGYPS 2020 Exhibition is expected to host 450 companies and receive over 25,000 attendees.


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