Egypt has embarked on a development plan in collaboration with international oil companies (IOCs), as human resources (HR) training programs play a key role in Egyptian oil and gas companies. These trainings are a catalyst to attracting valuable talents, developing their technical know-how, and qualifying them to take on leadership positions in the future.
Under the umbrella of the Modernization Project, health, safety and environment (HSE) comes as a top priority to secure the industry’s work environment. This stems from the belief that the oil and gas industry’s success is based on lowering its risks. Thus, the Ministry of Petroleum and Mineral Resources (MoP) has endeavored to ensure safety on both levels; the employees’ safety and the occupational safety.
An increase in production rates comes as a sign of success for the oil and gas sector in Egypt. The total production of crude oil and natural gas recorded around 6.8 million tons in June 2019, up from 6.1 million tons in June 2018. In July 2019, crude oil production reached around 675,000 barrels per day (b/d). It is also worth keeping in mind that the Ministry of Petroleum and Mineral Resources spares no effort in maintaining a minimum crude oil production rate of around 670,000 b/d; it also targets raising the daily production of crude oil to 720,000 b/d by the end of fiscal year (FY) 2019/20.
For many decades, the oil and gas sector has witnessed the occurrence of many accidents. The mounting number of these incidents rang the alarm bells for the sector’s experts to work on ameliorating the standards of Health, Safety, and Environment (HSE) in order to eliminate these catastrophes.
Thanks to the prosperous state in the Egyptian oil and gas industry, the investment climate has altered accordingly. In fact, the current state has attracted many International Oil Companies (IOCs) to implement new projects or even expand their current investments. As a result, the Mergers and Acquisitions’ (M&As) transactions in Egypt have witnessed a boom recently.
Recent decades have seen a marked boom in the development of offshore oil and gas activities. Due to the increasing energy demand and new technological innovations, offshore drilling extended their activities in the deep water areas. As of today, almost a third of the oil and a quarter of the natural gas consumed in the world comes from the underwater. This rush to offshore oil and gas exploration and production is not about to end as forecasts show a continuing growth of production in traditional offshore regions and significant development in new areas, particularly the Eastern Mediterranean region.
Energy subsidy reform is a main pillar of Egypt’s economic reform program. The government has implemented the last round of subsidy cuts in June 2019 and the subsidy's system reform is supposed to be ongoing until 2020. It is worth noting that according to the Middle East and North Africa (IFPRI) paper, titled “Phasing Out Energy Subsidies as Part of Egypt’s Economic Reform Program: Impacts and Policy Implications,” the first wave of the fuel subsidy cuts began in 2014 by increasing diesel prices by 64%, 80-octane gasoline by 80%, and 92-octane gasoline by 40%. Overall prices averaged at a 50% increase; however, despite the increase, fuel products remained heavily subsidized; hence, the government continued its fiscal reform by implementing further cuts.
As Egypt is becoming a regional energy hub, the petroleum sector also aims at increasing the added-value in natural gas and oil projects, as evident by the boom in the Egyptian petrochemical industry with many projects underway as part of the National Petrochemical Plan (2002-2022). The petrochemical sector accounts for about 12% of Egypt's total industrial production and contributes 3% of Egypt's Gross Domestic Product (GDP), according to the General Authority for Investment and Free Zones (GAFI).
“Egypt’s Oil and Gas Modernization Project ”is vastly becoming a common phrase widely spread within the sector. It was the turning point, which allowed the sector to work on its challenges and achieve major successes witnessed during the past couple of years. Taking a closer look at this project, we can assure that everyone is working hard to achieve the project’s vision and create a huge transformation to the whole sector along its full value chain.
As the global oil and gas market grows, exploration and production (E&P) companies tend to merge to be more competitive. One of the most prominent mergers that occurred recently is by two leading German based firms, Wintershall Holding GmbH (Wintershall) and DEA Deutsche Erdoel AG (DEA). The merger was completed on May 1,2019 after granting the needed approvals from all relevant authorities, shareholders BASF and LetterOne.
