The Ministry of Petroleum aims to operate and develop 11 projects for the production of gas and oil during the fiscal year 2019/20, in the deep water areas of the Mediterranean Sea, the Delta, the Gulf of Suez and the Western Desert.
The projects are expected to add about 2.5bn cubic feet of gas per day (bncf/d)and more than 32,000 barrels of crude oil and condensates to increase production and compensate for the natural decline rates of the wells, according to Tarek El-Molla, minister of petroleum and mineral resources in an interview with Daily News Egypt.
El-Molla explained that the projects include the completion of the development of the Zohr field to reach maximum production, and the development of the Raven gas field, which represents the third phase of the fields of northern Alexandria, the West Nile Delta and the fields southwest of Baltim, Western Borlos and the stage 9 B West Delta and the second phase of the fields of North Sinai, along with several projects in the Delta.
This is in addition to the implementation of projects north-west of October in the Gulf of Suez and the development of the Bat, Iris, and Qasr in the Khalda Petroleum Company fields in the Western Desert, as well the project to increase the capacity of marine shipping facilities for crude oil for the Western Desert Operating Petroleum Company (WEPCO).
He pointed to the increase in gas production rates to about 7.5 (bncf/d), crude oil and condensates to about 700,000 barrels per day, during the next fiscal year (FY) to contribute to secure the needs of the domestic market of fuel products.
Furthermore, he noted that the Italian Edison Company has allocated about $4bn for gas exploration in two areas of the Mediterranean.
The investments are divided into about $2bn for each region. The ministry and the Egyptian Natural Gas Holding Company (GAS) are following up on the operations currently carried out by the company in exploration programmes in both regions, he indicated.
He said that the company has completed a three-dimensional seismic survey programme for an area of more than 2,600km in the area north of the Theka concession area and plans to begin digging another exploratory well in this area during the current year.
Edison also plans to dig another exploratory well in the north-eastern region of Ras Habi during the same period, after the completion of the ongoing programme to reprocess three-dimensional seismic data for an area of 2,000km.
The minister of petroleum said that three international bids will be put forward for oil and gas exploration this year by the Egyptian General Petroleum Corporation (EGPC), EGAS, and Ganoub El Wadi Petroleum Holding Company, which will float the first bid for the Red Sea research.
El-Molla said it is planned that foreign investments during the current FY will reach over $10bn to search for oil and gas and develop the discovered fields.
Moreover, he pointed to the growing oil activity and projects implemented as a result of the success of the ministry’s strategy to attract more investors and encourage international companies operating in Egypt to pump more investments.
Investment in exploration and field development also recorded $10bn in 2017/18 and 2018/19, he said.
In a related context, the minister of petroleum, said that the plan is to complete the implementation of the direct gas pipeline between the Aphrodite field of Cyprus and Egyptian liquefaction facilities in four years.
Moreover he remarked that the preparations for the implementation of the project, after the signing of the joint government agreement between Egypt and Cyprus—which is the first of its kind in the region— will maximise the economic utilisation of Egypt’s infrastructure in the field of natural gas and the discoveries of Cypriot gas in the eastern Mediterranean.
The ministerial meeting of the Eastern Mediterranean Gas Forum that will be held by the end of April to discuss and complete the establishment steps of which is an important and necessary move, paving the way for activating Egypt’s role in the exploitation of natural gas in the eastern Mediterranean through the infrastructure it owns, declared the minister of petroleum.
He added further that the forum will contribute to achieving great returns for Egypt to become a regional centre for energy trading.
The forum will also contribute toward achieving the optimal economic exploitation of the infrastructure of natural gas and attracting more investments, securing energy sources to meet the needs of the country and provide jobs, and the provision of foreign exchange.
Meanwhile, the minister of petroleum said that the government is continuing to implement the reform programme for the energy subsidies system, which started in 2014 for rationing the subsidy, while taking many measures for the social protection of lower-income classes to protect them from the effects of correcting the pricing structure of petroleum products.
He added that the reform of the system of energy-oriented subsidy comes with the aim of correcting the pricing system of petroleum products, which will positively contribute toward achieving optimal economic utilisation of petroleum products and rationing consumption.
El-Molla also mentioned the provision of fuel subsidies to increase spending on social protection programmes and necessary services such as education and health, and to achieve liquidity for the oil sector in order to enable it to continue to playing its primary role in meeting the needs of the domestic fuel market.
He imparted that the energy subsidy had negative effects on the Egyptian economy, and did not benefit the target groups, while the wealthiest seized the largest portion of the subsidy allocations.