The oil and gas industry is one of the most dynamic industries in Egypt, and hydrocarbon production is by far the largest single industrial activity, representing in 2016/2017 approximately 16 percent of Egypt’s gross domestic product (GDP) and 30 percent of the foreign direct investment (FDI) in country. (export.gov 2018). Egypt has a proven reserve of about 4,400 million barrels of oil and 62.8 trillion cubic feet of natural gas at the end of 2017.
Currently, Egypt has the largest refining capacity in Africa and home to quite a lot of international oil companies. As of now, the government is updating existing refineries, and there is a hint that a new private-sector refinery is also set to begin production.
The country plans to invest around $38 billion developing its petrochemicals sector over the next five years. This sector represents about 12% of industrial production and generates revenues amounting to about USD 7 billion, which is nearly equivalent to 3% of GDP. Robust interest in upstream license round despite low oil price, a domestic demand market of over 90 million people, with a demographic that supports growth, sovereignty over a key oil and gas transit channel – the Suez Canal to name a few, positions Egypt as one of the oil and gas producing countries that seem to have a seemingly perfect game plan. Early 2018, a new international bidding round was announced, including 9 blocks for Gulf of Suez and Western Desert.
Not ignoring opportunities waiting to be tapped into for example deep-water areas of the Mediterranean Sea and western desert region remain underexplored and hold considerable and significant potential in terms of hydrocarbon resources. Also, fuel subsidy reforms will make the Egyptian market more attractive to investment as sales prices increase. Already, late last year several multinational firms announced commitments to increase their investment to the tune of $10 billion in fiscal year 2018/2019.
There is already a strong established outlook and growth pattern for hydrocarbons in Egypt which will in many ways boost all round economic development, existing oil and gas infrastructure and dynamic economic activity.