The New Minister of Petroleum: Has the Sector Found Its Saviour?

The appointment of Eng. Osama Kamal to the post of Minister of Petroleum and Mineral Resources proved to be a surprise to many, prompting varied predictions and expectations. Egypt Oil & Gas weighs in on the new man in charge and his prospects for success.

Following President Mohamed Morsy’s decision to formally task Dr. Hesham Qandil with forming a new government to succeed that of Dr. Kamal El Ganzoury’s, predictions for the new cabinet were rife among analysts and experts. Some expected that the newly appointed cabinet would be comprised mainly of Muslim Brotherhood cadres and sympathizers, while others predicted a technocratic government with a Brotherhood presence.

The chosen cabinet managed to defy most projections and predictions, throwing up many surprising names. Among the surprises was the appointment of Eng. Osama Kamal as minister of petroleum and mineral resources. While Eng. Kamal was doubtlessly among the key officials of the sector during the past few years, having served as head of the Egyptian Petrochemicals Holding Company (ECHEM) for two years, his name was not among those most hotly tipped for the position, and he remains a relatively unknown quantity to many in the sector.

The new minister boasts a solid resume, having worked at several axial companies and entities within Egypt’s petroleum sector. Besides his experience at ECHEM, in which he served as Vice Chairman for Agreements and Planning, Eng. Kamal was appointed to head the Misr Oil Processing Company (MOPCO), and has also served in high managerial positions at ENPPI and Petrojet, two companies considered to be crucial to the implementation of any major project in Egypt’s petroleum sector.

Thirty years of experience in the sector speak volumes about the man’s qualifications for the post, and the fact that this experience includes projects and economics will satisfy many who view such experience as vital for success in the post of petroleum minister.

Questions do remain however, regarding the mechanisms in place for the identification and resolution of the most pressing problems plaguing the sector, and the timeframe in which such mechanisms can be put in place.

More importantly, certain elements regarding the identity of the new minister will most probably raise a few eyebrows. Many of those working in the sector tentatively refused to comment on the man’s history in the sector, and a number of sector veterans labeled Eng. Kamal the “prodigal child” of former minister of petroleum and current prison inmate Sameh Fahmy, a figure largely reviled in Egypt and viewed as a symbol of corruption. The fact that Eng. Kamal rose through the ranks and witnessed success under the stewardship of Sameh Fahmy does not necessarily blot his reputation in any way, as effectiveness can result in plaudits and success regardless of the surrounding atmosphere and has in many cases done so in the regime of Mubarak itself.

The question remains, nevertheless, of whether the minister will be able or willing to dispose of the old guard in the sector’s leadership, or at least those elements within it which ought to be removed, and implement the structural adjustment necessary for the Egyptian petroleum sector to move forward. Some view that Eng. Kamal is not the man to do this. Others expect a purge similar to President Morsy’s now famous dismissal of security chiefs, as an indication by the minister of his intention to make a clean break with the past. Only time will tell.

A high-ranking ministry source, which refused to be named, opined that corruption and inefficiency in petroleum sector are blatantly, inescapably clear owing to the fact that the sector is relatively compact. He went on to insist that it is absolutely certain that a top ranking official such as Eng. Kamal is aware of the problems and of their sources, and that this will therefore be an important barometer of the minister’s abilities and intentions.

Other key factors upon which Eng. Kamal will be judged will be his ability to create a drilling and exploration framework that will boost the country’s reserves in the coming period, an important area in which he remains largely untested.

A more immediate test of the minister’s capabilities will be the issue of transparency within the sector, a trait sorely missed in the past in the recent past in particular. Statements issued by sector officials have often contradicted each other, not to mention contradicted clear facts, and problems that are left unexplained or poorly explained were all too common. The fuel shortages dilemma in particular has revealed the absolute lack of clarity and transparency that characterizes Egypt’s petroleum sector, and it will be Eng. Kamal’s job to ensure that the flow of information becomes smooth and consistent, and that the public is always engaged appropriately.

Besides untangling messes that have festered for years before the revolution and ones that have surfaced in the months that followed it, the minister will also have to consider taking bold steps relating to the very core structure of the way the sector currently works. The presence of EGAS and GANOPE as entities separate from the EGPC is an issue that has regularly sparked debate. A clear and convincing justification for such a state of affairs does not appear to be available despite the fact that it has been the case for many years. Other conflicts of authority and structural oddities are also present in the sector, such as an apparent contradiction between the mandate of ECHEM and offices within the EGPC dedicated to overseeing refining and petrochemicals projects.

Reforming the entire authority and regulatory structure of the petroleum sector requires a man willing to take big leaps, and it is not yet clear whether Eng. Kamal will be able or willing to take such drastic steps.

Both great optimism and great apprehension are warranted. The new minister of petroleum cannot be easily judged based on history because the appointment of this particular individual was highly unexpected (though not unjustified). Challenges will spring to block Eng. Osama Kamal’s path to success as soon as he puts a foot forward, as that is the nature of the petroleum sector and the state it is currently in. Assessment of the decision to charge him with the ministry will have to wait, but there is no doubt that he has got plenty of opportunity to prove his mettle.

By Ahmed Farahat and Ahmed Maaty


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