Throughout history, Egypt has had significant energy resources, both in traditional fossil fuels and in renewable energy, due to the abundance of underutilized land and year round sunshine within the country.
Exemplifying this is Egypt’s proven hydrocarbon reserves which stood at 3.3 billion barrels of oil and 62.8 trillion cubic feet of natural gas by the end of 2017. Aware of the potential which lies within this sector, the Egyptian government encourages international oil companies to participate in the oil and gas sector, and as a result of their implementations more than fifty international oil companies are currently operational in Egypt.
The existence of the Suez Canal which was recently reopened, along with the Suez-Mediterranean (SUMED) pipeline, has solidified Egypt’s position as a player within the international energy markets . The Suez Canal in particular is a strong asset for the sector as it provides an important transit route for oil and liquefied natural gas (LNG) shipments traveling southbound from North Africa, and along the Mediterranean Sea to Asia. Additionally, fees collected from the operation of these two transit points generate significant revenue for the Egyptian government.
Oil and gas is also a substantial sub-sector of the Egyptian economy, with hydrocarbon production alone constituting the largest single industrial activity, representing approximately 16% of Egypt’s total GDP. Additionally, the petrochemical sector represents about 12% of industrial production and generates revenues totaling USD 7 billion yearly, equivalent to nearly 3% of the total GDP.
Within the region of Africa, Egypt has the largest refinery capacity producing a minimum of 840,000 barrels per day. To aid in the development of the sector, the government plans to invest an additional USD 14.5 million into the development of petrochemical production over the next five years, focusing primarily on updating existing refineries, and encouraging new private-sector refineries to enter the market.
Essential to the development plan of any sector are laws and regulations which facilitate international, regional and domestic investments. Since the 1990’s the Egyptian government has focused on enacting such laws, whilst simultaneously addressing the regulations and procedures that hindered
production and facilitated investment resolutions.