On September 12th H.E Engineer Sherif Ismail became the head of the Egyptian government. The timing couldn’t be better as it directed the media away from protests about the new civil service law, protests that could have expanded further affecting the upcoming parliamentary elections.
Following the mega Eni gas discovery offshore Egypt, the appointment of Ismail is believed to be a message to foreign investors, mostly to international oil companies (IOCs), promoting trust in the ability of the Egyptian government to host a desirable investment environment. This is a notion that will encourage more agreements, and thus pump billions into the arteries of the Egyptian economy.
The second task of the new government is to supervise parliamentary elections, presenting it in a proper image to the rest of the world, especially after corruption charges tainted Mahlab’s government.
Before making any projections, light must first be shed on Sherif Ismail himself, the head of the new government. Ismail is known for being an efficient man of few words, a petroleum man to the core.
Born in 1955, Ismail graduated with a Bachelor of Engineering in Mechanics from Ain Shams University in 1978, after which he began his career at Mobile Company (now part of ExxonMobil), moving in 1979 to join Enppi, where he reached the post of General Manager of Technical Affairs and became a member of the board of directors.
In 2000 Ismail took over the position of Undersecretary of the Ministry of Petroleum, by 2005 he was appointed Chairman of the Egyptian Natural Gas Holding company (EGAS), and then moved in 2007 to head the Ganoub El-Wadi Petroleum Holding Company (GANOPE)
On July 16th 2013, Hazem El-Beblawi became Egypt’s Prime Minister and assigned Ismail the Ministry of Petroleum and Mineral Resources, a post he has successfully maintained past Beblawi’s government, and throughout Ibrahim Mahlab’s government, making him an obvious choice as head of the following government.
Ismail left his post as the petroleum minister on a high note after the discovery of a mega gas reservoir in the Mediterranean, one that may solve many of Egypt’s problems. Another major achievement of his was the reduction of foreign dues to help boost foreign oil companies’ (IOCs) confidence in the Egyptian government. This move will likely boost both production rates from existing fields and encourage new investment into untapped reservoirs. In fact, reducing the climbing debt owed to IOCs from $6b to $2.9b is believed to be one of the main factors that paved the way for Ismail to make it to the top of the government. Egypt needs to make sure that IOCs know that a decision to invest in Egypt is a sound one.
A major step forward by the ministry of petroleum was the diversification of Egypt’s energy mix. The country is now moving towards its target of having renewable energy represent 20% of its energy mix by 2020. In addition, the ministry worked with cement companies to help shift about 90% of them to use coal for energy, a decision that helped ease the country’s energy crisis.
Egypt began recently shifting towards liberalizing the gas market in Egypt, allowing factories to import their needs, via the national gas grid. This move will pave the way to significantly reduce future gas shortages.
Egypt is at the beginning of a critical phase. The wellbeing of Egypt’s economy will in large depend on the next chapter. According to Moody’s Investors Service, conditions for IOCs operating in Egypt will get worse before they begin to improve by the end of 2016, due to the reduced expectations of crude prices. The Egyptian government will have to ensure that this is not the case, proving itself lucrative grounds to the recent wave of investors that began since last March’s Economic Conference. Additionally, all recent investments, discoveries, payment of dues, efforts to boost production are expected to reflect positively on the development of the country’s economy.