The petroleum sector's contribution to the national economy was remarkable in 2005-2006. Sherine Nasr leafs through the ministry's latest performance report The petroleum sector appears to pride itself on a number of success stories, as seen in the Ministry of Petroleum's annual performance indicator report for 2005-2006. The recently- issued report carried a package of good news of expanding oil, gas and petrochemical industries, and noted that the sector played an active role in creating more job opportunities, maximising revenues and contributing positively to the national economy at large. Minister of Petroleum and Mineral Resources Sameh Fahmi stated that 2005-2006 witnessed several landmark developments in the oil, gas, petrochemicals and mineral resources sectors. "It saw the inauguration of the Idku export and liquification complex, and the first experimental operation of the second phase of the Arab Gas Pipeline from Aqaba to Al-Rehab in north Jordan," noted Fahmi. The two Edku liquifcation plants began operations in April, 2006, at a capacity of ten billion cubic metres per annum, to produce 3.6 million tonnes of liquified natural gas (LNG) each with investments of $2 billion. Meanwhile, a consortium of Egyptian petroleum companies -- namely Enppi, Petrojet and GASCO gas -- successfully concluded the task of transporting natural gas from Al-Aqaba to Al-Rehab power station in Jordan. Completing the extension of the Arab Gas Pipeline from Al-Rehab to the Syrian border with Jordan is underway, allowing Egyptian natural gas to be exported to Syria soon. Meanwhile, crude oil, natural gas, condensates and liquified petroleum gas (LPG) production during 2005-2006 achieved the highest ever records, reaching the equivalent of about 71 million tonnes. This is an increase of 12.1 million tonnes equivalent compared to the previous year. Also, the Gulf of Suez and the Western Desert represent the majority of crude oil production, since each contributes approximately 34 per cent of the country's total production of crude oil, followed by Sinai, the Eastern Desert, the Mediterranean and the Delta. "Natural gas production amounted to 38.4 million tonnes equivalent, accounting for 54 per cent of total production and representing an increase of 163 per cent compared to 1999- 2000 production rates, which reached some 14.6 million tonnes equivalent," added the report. At the same time, production in several new fields such as Qasr began, while production at other fields such as Temsah, Baltim, Port Fouad and El-Wastani increased by putting new wells on stream. The sector was lucky in that period, since several remarkable oil and gas discoveries were located. According to the report, some 42 new petroleum discoveries were made -- 22 crude oil and 20 natural gas -- in the areas of the Gulf of Suez, Nile Delta, Western and Eastern deserts, the Mediterranean and Sinai. "For the first time, gas discoveries were located in the deep layers of the Mediterranean area, at a depth of about 5100m at Port Fouad 1 deep offshore well," stated the ministry's document. "This added about 378 billion cubic feet of gas and five million barrels of condensates since the start-up of upstream operations at these areas." For the first time as well, crude oil was also discovered at Kafr El-Sheikh's more shallow layers in the Mediterranean at the West Delta Marine concession area, in addition to a gas bearing layer which added some 75 billion cubic feet of gas and six million barrels of condensates. This, naturally, promised more crude oil and natural gas discoveries in these areas. Other massive gas findings were discovered at Raven-2 in the north of Alexandria concession area, and at the Bala'eem onshore concession area in the Gulf of Suez, to name a few. One major corrective step undertaken by the petroleum sector during 2005-2006 was the amendment of the gas pricing formula in petroleum agreements, which helped restore some $3.86 billion to the government. The sum is considered the highest return of otherwise lost revenues in foreign currency in the history of the petroleum sector, according to Fahmi. A study by Wood Mackenzie, a major international consultant, of Egypt's exploration and development operations over the past ten years noted exploratory success rates which reached 30 per cent, with a three-fold increase compared to international exploration rates in the Mediterranean Sea. "Over the past decade, Egypt attracted about 46 per cent of international investments in upstream and development domains in the North African region, surpassing Algeria, Libya, Morocco and Tunisia," indicated the Wood Mackenzie study. The year 2005- 2006 set a record in petroleum, natural gas and petrochemical products exports which reached $10.6 billion, a figure that was originally marked for 2010. Thus, exports from the petroleum sector stood for almost 55 per cent of the country's total exports, compared to 38 per cent the previous year. On the local arena, the sector continued its plans to satisfy the requirements of the local market either through local production or imports. "Selling energy at subsidised prices has cost the country some LE42 million in that period," stated Fahmi. In the meantime, the national plan to connect the country through a network of natural gas pipelines continued successfully. A gas pipeline extending from Beni Sueif to Abu Kurkas in the governorate of Minya in Upper Egypt is underway; so is the Sinai gas line from Taba to Sharm El-Sheikh which will supply the tourist city with its power needs. "The same pipeline will also feed Dahab and Nuweiba," added the ministry report. Two more natural gas pipelines will also be extended between Quseir-Hurghada-Safaga and Dahshour-Kuraimat. The success of the petrochemical sector was no less impressive. During the past decade, the petrochemical industry has been keenly developed to play a major role in bolstering the national economy. The first phase of a ten-year national plan was completed last year, with eight major projects launched or nearing completion at a total investment of about $5.4 billion. In 2006, the first acrylic fibre production project became operational, and production of petrochemical products reached four million tonnes per year at a value of about $3 billion. The propylene and polypropylene production project, located in Port Said and established at a cost of $650 million, was inaugurated two months ago. The new plant is constructed with a design capacity of 400,000 tonnes/year of propylene. Other projects include the Damietta-located methanol production complex and the ammonia/urea compound with investments worth $750 million and $1 billion, respectively. Meanwhile, Dekheila Port in Alexandria will house a major polystyrene production project, which is designed to produce 200,000 tonnes/year, at a cost of $150 million. In the field of Arab cooperation, Egyptian petroleum companies have actively and efficiently penetrated a number of Arab countries to carry out exploration and extraction activities. "Petroleum companies are now working in nine Arab countries, including Saudi Arabia, Qatar, Syria, Jordan, Algeria and Kuwait," noted the report. "Total contracts reached about $2.7 billion."
