Egypt’s new gas discovery will not cover energy needs in the next four years, said Khaled Abu Bakr, Executive Chairman of energy firm Taqa Arabia.
Abu Bakr said that the preparation of the new gas discovery’s full infrastructure may take five to six years.
On the second day of the Euromoney conference on Tuesday, Abu Bakr reviewed Egypt’s energy sector in the first session of the day. Regarding Eni’s Mediterranean Sea discovery, Abu Bakr said its impact will be huge, adding that young entrepreneurs will benefit from this project and develop services in the energy sector.
The gas discovery will, when ready, enhance Egypt’s economy, reduce the budget deficit and create job opportunities, he said added.
The Egyptian government has to design an effective energy policy, liberalise the market and cut energy subsidies in order to boost the energy sector, he added. “Subsidies should be used properly and be [used] for new industries,” Abu Bakr said.
Last week, Italian energy giant Eni announced that it had discovered the “largest ever” natural gas field in the Mediterranean Sea off Egypt. The “supergiant” well lies 1,450 metres (4,700 feet) beneath the surface in the Shorouk Block, and about 190 km (120 miles) off the Egyptian coast, the company said.
“Low global oil prices and increased domestic gas production will help alleviate the negative pressure on Egypt’s current account balance by reducing the need for natural gas imports and eventually re-establishing the country as a net hydrocarbon exporter,” according to an Eni report.
Eni’s announcement of the discovery of a large offshore natural gas field in the eastern Mediterranean is credited positive for the company and for Egypt, Moody’s Investors Service said in a Friday statement.
For Eni, the discovery will add sizable undeveloped resources and proven reserves, whilst also potentially adding to its production base in the medium-term. For Egypt, the discovery will help alleviate the balance of payments pressures. The potential step up in oil and gas sector investments will support GDP growth and government revenues, Moody’s said.