Egypt’s production of crude oil, condensates and biogas hit 2.955 million tons in April, up 7.14 percent from April 2008, according to figures published on Egypt’s Statistical Indicators website.
April’s numbers were down slightly from March 2009 production levels, which reached 3.033 million tons, but up from February levels of 2.759 million tons.
Petroleum production levels have remained relatively stable since the onset of the world financial crisis, showing overall growth throughout 2008 and into 2009.
Last year’s growth numbers showed a 6.3 percent increase in production, according to Magdy Sobhy, economics expert at Al-Ahram Centre for Political and Strategic Studies.
“This year’s statistics show a slight improvement, but there is nothing outstanding about the new statistics as they show a normal growth rate for this sector in the Egyptian market,” he said.
While production hasn’t been hard-hit, the prices of crude oil have been negatively impacted in recent months said Ibrahim Khidr, chairman of United Oil Services Company (UNICO).
“We’ve seen an impact for sure. The crisis has decreased the price of crude oil and dampened projections for future growth in 2009. I expect that the prices will begin to recover by 2010,” he explained.
The impact of the crisis is most evident not in production levels but in sinking export volumes, according to Sobhy.
“We’ve seen a 62.7 percent decrease year-on-year in March in exports of crude oil and a 38.5 percent decrease in natural gas exports. These drops are mostly due to prices, which have dropped about 55 percent since March 2008, not quantities produced,” he said.
Egypt’s petroleum industry has been bolstered by active government investment and new partnerships formed under the auspices of Petroleum Minister Sameh Fahmy.
Over the past five months the Egyptian cabinet has approved 17 new petroleum agreements constituting $3.5 million in investments.
Fahmy stated this week that Egypt’s oil sector has continued to attract international investment for exploration and development of oil and gas fields in spite of the global financial meltdown, local news reported Monday.
He added that continued investment in the sector would assure future investments in Egypt’s oil and gas industry.
The development of natural gas reserves has been a major growth area in the sector in recent years. Proven natural gas reserves have doubled over the past decade, and Egypt has established itself as an up and coming player in the natural gas export industry.
According to Khidr, natural gas represents the future of the industry as the country’s oil fields age and begin to lose production capacity.
“Crude oil is in decline due to the nature of the fields in Egypt. Our fields are old and their production levels are decreasing as the life of the field becomes longer and longer. The reason we continue to see production growth is because natural gas production is compensating,” he said.
Sobhy agrees that the key to sustaining production growth into the future is continued investment in natural gas.
“It is hard to rapidly increase petroleum production due to limited resources. Natural gas, however, has potential to grow exponentially depending on how much is invested in the field.”
(Daily News Egypt)