Egypt’s International Economic Forum held a seminar in Sky Resort in New Cairo yesterday and it was organized under the motto “Energizing Egypt’s Future: The Outlook for Oil & Gas”.
The one-day seminar, dedicated to the Egyptian petroleum sector, was a chance for Eng. Sameh Fahmi, the Egyptian Minister or Petroleum, to give an overview about the domestic oil and gas industry as he was the distinguished speaker of the seminar.
Fahmi tackled most of the crucial issues of the sector and explained his vision to the forum’s members who were figures and officials from the giant Egyptian as well as the foreign companies operating in Egypt related to the oil and gas sector.
In his speech which followed the welcoming speech of Mohamed Shafik Gabr, Chairman of Egypt’s International Economic Forum, Fahmi highlighted the challenges hindering the national petroleum sector which in fact concentrated on the natural gas industry.
“We face brutal challenges in the natural gas field and do our best to overcome them,” Fahmi stated during his speech.
“Some of the challenges are the declining of the gas prices compared to the crude oil, the swinging foreign currency exchange rates to the Egyptian pound and the high cost of drilling or developing the discoveries in the deepwater of the Mediterranean Sea.
“Hence, we approached a new economical petroleum agreement form for encouraging the international petroleum company to invest more in the local market without neglecting the benefits of both sides. I think we are going on the right path as we achieved 63 new oil and gas discoveries during the 2009/2010 fiscal year,” added the 61-year-old Minister.
In addition, Fahmi gave another proof of the successful strategy implemented by the Ministry of petroleum that in 2009 the members of the Organization of Arab Petroleum Exporting Countries (OAPEC) reached 44 new petroleum discoveries while Egypt alone had 64 discoveries.
Commenting on the critical voices which assume that the Egyptian reservoir of natural gas is declining due to the contentious exporting, Fahmi said: “Our reservoir during the current century rose from 11.8 to 18.4 billion equivalent barrels of oil and gas; 78.1 trillion cubic feet of natural gas and 4.47 billion barrels of oil.”
Along with the increase of the reservoirs, the daily production amplified to be about 2 million equivalent barrels per day in the current fiscal year after it was 1.1 million, according to Fahmi.
“Since we began to export the natural gas in 2000, our production has been increased by 275% so far. I need to explain that exporting the natural gas in not a goal in itself but it’s only a mean for escalating the Egyptian foreign currency in addition to provide the necessary funding to meet the needs of the domestic market of diesel and butane gas imported from abroad. Besides, it’s also a mean to meet the payment obligations of our foreign partners and finally to achieve a strategic goal which is boosting Egypt’s confirmed reserves of natural gas in the shortest period possible in order to ensure energy sources,” he explained
“In the last period, as a result of the growing demand of the domestic market for natural gas and also the shortage in electricity produced, we manoeuvred in order to decrease the percentage of the exporting quantity of gas to be 29 percentage of the total production. While in the period between April and June of 2010, we successfully made it 26 percentage only of the overall production to pump it in the domestic market.”
It’s is known that the total Egyptian production of natural gas is divided into three quantities; third for the domestic market, third to be exported while the other to be reserved to the coming generations.
Regarding the third which is dedicated to the domestic consumption, Fahmi said that the Electricity Sector alone consumes 56% of it while the Industrial sector utilizes 30%.
“Moreover, another obstacle which blocks the way upon the prosperity of the sector is the outdated infrastructure which needs to be maintained and updated from time to time. Nevertheless, unfortunately, there was no planned strategy to implement to maintain it before having it expired.
“Meanwhile, we invest money and time to update it in order to raise its efficiency although it can’t be done right away since the restoring or updating process takes time. Nonetheless, I believe that the future of the Egyptian petroleum sector is promising and the coming generation will feel and consider my belief.”
Covered By: Ahmed Morsy