The newly appointed Petroleum Minister Eng. Mahmoud Latif will start his first days with a working agenda that is filled with lots of tribulations. The new ministry came knowing that their working table overflowing with controversial contracts, late deals, $6 million petroleum debt, and labor strikes await to be solved in such critical time
The late events that Egypt witnessed, 25th of January, left its mark on every sector in Egypt. Some of the experts saw that the petroleum sector will not be affected, and others oppose it, as they believe that the oil and gas sector will be largely affected.
On the other hand, all experts agree on the aftermath on the petroleum sector that led to the dismissal of Eng. Sameh Fahmy.
According to many experts, it is a new opportunity for Egypt to market itself by offering new concessions areas, more desert exploration to attract more foreign investments into the country.
The opposing opinion looks at the fact that Egypt is not a major oil producer, but it has the political stability that magnetize outer investments and the lack of security and political solidity that Egypt went through lately may sent away the eyes of investments, which always look for a safe and stable environment. The late demonstrations and strikes held by the petroleum workers may affect the judge of the investor.
Egypt Oil and Gas Newspaper learned from its sources in the joint venture companies that they are on track with their plans, whether it’s development or drilling or production plans.
Among those companies that did not change their work plan for the fiscal year 2010-2011 are PetroAmir, Gemsa Petroleum Company (GEMPETCO), Zaafarana Oil Company (ZAFCO), Wadi El Sahl Petroleum Company (WASPETCO), West Bakr Petroleum Co., El Hamra Oil Company, PetroGulf, and El Waha Petroleum Company (OWAPCO).
“We are resuming our fiscal plans of 2010-2011 and we are not affected by the late events,” said Omar Bibars, Chairman and Managing Director of PetroAmir.
“We have a main target this year, to increase our production of crude oil from our concession in the Red Sea to reach up to 15,000 barrels of oil per day, from the current daily production of 4300 barrels.”
“The company had a discussion with the foreign partner, Greek Vegas Oil & Gas, which entirely agrees to continue with the original plan. We all saw that there will be no obstacles to stop the company from fulfilling its plan as we already won the approval of the EGPC to start our drilling operations, after adopting the budget for that fiscal plan of the company,” pointed Bibars.
He went on to describe how each Egyptian petroleum company has a role to keep the foreign investments in Egypt. “We conducted lots of projects, like the water injection project to extend the pipelines of natural gas to reach the fields of SUCO.”
Bibars added that the company is joining forces with SUCO to implement a new project during the coming period. The procedure is a part of the company’s new fiscal plan of 2010-2011.
“PetroAmir is conducting a new study to evaluate the gas extension project to SUCO. The operation to be used in the artificial lift of the crude oil in SUCO,” Bibars explained.
He also showed his positive belief that Egypt will come out superior from the temporary chaos, especially that many locations are remained undiscovered in the Western Desert, Gulf of Suez, and the Mediterranean.
Having the same opinion, a top official from an Egyptian Petroleum Company said that the influence of January 25th will not be this gigantic and that the petroleum sector is capable of hitting its target no matter.
“The Egyptian companies know how to attract foreign investments. We have the concessions and the working force that can encourage international investors into the local market,” said the source.
He went on to specify the gas discoveries that can draw the investors’ attention and how can the ministry use it to bring them to the Egyptian market.
“Currently we are working on reassessing some of the data collected from the 3D seismic survey of the drilling plan of 2010-2011. The company is studying the information gathered from the 3D seismic survey they conducted in the company’s acquisition area in Gulf of Suez using all the geophysical and petrophysical data recorded from the wells.”
“The studies aim at allocating the oil bearing layers in the concession area to determine the accurate drilling spots and whether it’s development or exploratory. Also to resolve the limits of the current tank,” added the source.
The source showed his gratitude to Eng. Sameh Fahmy, the former petroleum minister. “Fahmy’s help also appeared in removing most of the obstacles that the oil companies faced whether in or outside Egypt. In addition, he helped into bringing international and Arabian investments into the Egyptian market,” the source elaborated.
Conversely, a source from Vegas Oil and Gas said that the new petroleum ministry would face huge problems that may affect the sector in Egypt, such as the temporary workers, especially that many refuse new labor and prefer to appoint members of their own family.
Vegas source stressed on the importance of the Egyptian petroleum companies to keep their word with the foreign firms. “They signed contracts that keeping it will show the foreign investor that Egypt is safe for more investments.”
“By continuing their drilling and production plans, they are helping the market to rise again and to attract more investments into the Egyptian marketplace,” pointed Vegas source.
He also stressed on the significance of Egyptian companies that hold international activities, as Petrojet, Enppi, and GASCO. “Their time came now for the rescue of the Egyptian petroleum sector. They must sign as many contracts in foreign and Arabian countries as possible.”
“The rest of the Egyptian companies must also follow the lead of companies like Enppi and try to sign more deals outside Egypt. They should be marketing the petroleum sector in Egypt and boosting the economical sector too.”
On another discussion matter, an official source told Egypt Oil and Gas Newspaper that the former ministry used to treat the temporary workers issue with short-term solutions. “There was never a clear decision towards solving such problem. They never addressed the salary differences between the workers and the heads. In the end, it negatively affected the production, when the workers started the strikes.”
The official source suggested that setting a clear plan for the upcoming period would help the new ministry reaching the targets.
Eng. Aziz Effat, Ex Assistant Chairman for Exploration and Board Member of Agiba Petroleum Co and Deputy GM. PetroSA Egypt, said that petroleum sector positively welcomed the appointing of Eng. Latif as the new Petroleum Minister. “They see in Latif that he will help the sector in reaching more targets through helping the workers in this sector. There are two lists for the hiring, one for those whom are close to the chairmen and of course it is rewarding, while the second is weak and less economical privileges.”
“The workers that were fired with no clear reason, and others whom worked for three years as temporary personnel, both will benefit from the new ministry as we all have faith in Latif,” said Effat.
Effat expected the upcoming stage to witness many companies aiming to boost their production and maintaining the stability with the foreign partner. “They will also help the ministry to attract more investments into the Egyptian market and to help assure the foreign investors that Egypt working wheel is revolving and did not stop after the 25th of January.”
“We must accept an important point that the new ministry does not have super powers to change everything in such short time, but we believe that they will foster a new strategy that will satisfy the Egyptian community and also to bring more economical benefits for Egypt,” Effat explained.
He also pointed to the fact that last year, the petroleum sector was able to bring $23 billion into Egypt, formed into the shape of new investments whether in exploration or drilling or refineries. “I think the new ministry will follow the lead of the old ministry in this measurement to bring more foreign assets into Egypt.”
The petroleum sector has always been known for its considerable share in the Egyptian economy, it will not be the first time that it faces obstacles and the main thing that can be noticed about the oil and gas sector is its capability of defying the odds. The upcoming days will show the true face of both the Egyptian petroleum workers and the Ministry, which should glorify their role to help Egypt rising to the challenge.
By Shady Ahmed