In line with Egypt's economic reform programme, the petroleum sector has launched a project to enhance work to capitalise on the country's natural resources, contribute to sustainable development, and attract more investment from abroad. The project's seven integrated tracks constitute a strategy to turn Egypt into a regional petroleum and natural gas hub. A steering committee was formed earlier this year headed by the minister of petroleum and including a number of the sector's leading figures to provide the support necessary for the project. A follow-up unit was then established to help integrate the project's seven tracks, and teams were put together to carry out the required tasks. In an interview with Al-Ahram Weekly, head of development of the petroleum sector at the Ministry of Petroleum Osama Mobarez explained the thinking behind the project. What are the reasons for developing the petroleum sector? After the political and security instability Egypt witnessed after 2011, foreign companies refrained from new investment, and new research and exploration agreements, which lie at the core of the production process in the field, were halted. During the same period, the amount of gas and petroleum produced decreased and debts to partners increased to $6.3 billion. This resulted in the widening of the gap between supply and demand and created many problems, including the frequent electricity cuts the country witnessed at that time. When the country regained its stability, we were able to embark on our reform plans, which have included launching bids, signing agreements and decreasing the debt to our partners by half. In 2015-2016, we imported liquefied natural gas to bridge the gap between production and consumption. In sync, the development of natural gas fields was accelerated and the massive offshore Zohr gas field was discovered and developed in record time with investment worth more than $12 billion. It is expected that this field will start production soon. We have also started the liberalisation of the gas market, and a new gas law has been issued this year. Nonetheless, despite the success in overcoming many challenges, we still need an integral plan to achieve sustainability. The project aims to overhaul the activities of the gas market to attract more investment and offer training tracks to develop our human resources, all with the goal of boosting Egypt's growth. What is the expected outcome of the project? We want the petroleum sector to regain its value as a cornerstone of Egypt's economy and the country to be a regional hub for the petroleum and gas trade. To achieve this, we are working on increasing the quality of resources management, decreasing expenses and adequately managing the system of supply and demand. This arrangement could yield $7-9 billion. Creating an environment that encourages excellent performance, putting in place a structure for the proper division of roles and responsibilities, and raising the quality of local petroleum companies to be able to compete internationally will all increase foreign investment. How many phases has the project gone through? There have been two phases. The first focused on identifying the problems of the petroleum sector through gathering data and holding workshops with officials from the different sectors of the field and foreign partners. During this phase, we assessed strengths and weaknesses, as well as risks and opportunities. The second phase was about coming up with a clear vision for the sector to maximise the benefits from our natural resources. In order to do so, we held meetings with middle management among others. We aspire to be a model of modernisation and development that can be replicated in other state sectors, all the while maintaining standards of safety, creativity, transparency and an impressive work ethic. How was this vision translated into the project? It was translated onto seven tracks: attracting investment in the fields of research and exploration; hierarchical reforms; human resource development; increasing the quality of refining and distributing petrochemical products and improving the efficiency of energy consumption; ameliorating production activities; turning Egypt into a regional centre that will be pivotal for the petroleum and natural gas trade; and providing decision-making support that allows for the better flow of data. How are you attracting investment for research and exploration? We are developing a system for bids that will simplify procedures and act as a model for agreements to bridge the time needed for the inflow of investment. This should be done by the first quarter of 2018. We have also identified the chances of increasing the production of the current fields, studied decreasing production costs, and expanded the use of new technologies. In addition, since the end of 2013 we have signed 76 new deals worth at least $15 billion, negotiated and continued projects that were halted, and amended previous agreements to meet the aspirations of our international partners and achieve our interests. All these steps were taken primarily to prevent shortages in gas and other fuel that could negatively affect electricity production. How can the added value of petroleum products be maximised? Do we need stronger infrastructure for this to take place? We do have strong infrastructure to support our goal of developing the production and distribution of petroleum, gas and petrochemical products. But we must also improve the efficiency of energy consumption and decrease costs at refineries. How will Egypt become a regional hub for the petroleum, natural gas and energy trade? All our efforts exerted for development are being channelled in that direction. We are capitalising on Egypt's strategic location, assets and infrastructure that allow for the free flow of petroleum and natural gas without technical or organisational hurdles. Encouraging private-sector participation will also help expand the natural gas market and boost economic development. The writer is a freelance journalist.
