Petroleum and Mineral Resources
Wednesday، 17 April 2013 - 12:00 AM
Egypt is one of the first countries in the world that is pioneering in various stages of the petroleum industry where the government began in 1886 by drilling the first well at Gamsa region in 1910. Then, the petroleum discoveries are continued in Egypt. In 1908, the oil is provided in commercial quantities in Gamsa after the establishment of mines and quarries department in 1906 and number of deeper wells were drilled.
Year 1904 is considered the beginning of foreign companies activities in Egypt, where the government has granted a concession to Cairo Syndicate company to prosect for oil in Sinai and Qena. Other companies propected for oil in other areas but without result. In April 1909, "Trust" company was able to produce oil from Gamsa field. The commercial production from this field began in 1910. In 1911, the foundation stone for the first refinery in Egypt was laid down. It is affiliated to the Egyptian-British oil wells company (Al Nasr oil company) in Suez city. It was operated in 1913. In 1956, the law of establishing the Egyptian General for Petroleum Corporation Affairs was issued. In late 1972, the first ndependent Ministry of Petroleum was established.
Currently, the Ministry of Petroleum has implemented an ambitious programme in order to increase Egypt's resources of oil and gas to meet the current position of the energy in Egypt and the gap between production rates and domestic consumption. The Programme includes many major points which have contributed directly to reduce the negative effects of natural contradiction in gas and oil production rates coupled with an increase in consumption that coincided with the failure to sign a new petroleum agreements from 2010 and the slow of the development operations of the discovered fields as a result of non-payment of dues of the foreign partners.
First: 2014… Finds, Projects and Serious Facing for Challenges:
Year 2014 witnessed a quantum leap in oil work to meet the challenges that facing the Egyptian petroleum industry the most achievements throughout the year are as follows:
Most Important Oil Finds:
The efforts of exploration provided 62 new petroleum finds until December 2014 including 40 finds for crude oil and 22 of natural gas. The Western Desert area topped the first in terms of the number of the achieved finds that reached 35 discoveries for crude oil and 12 for natural gas, then, Mediterranean area includes 7 discoveries for natural gas, third the Delta land includes 3 discoveries of natural gas followed by Suez Gulf area that includes 2 discoveries for crude oil and Eastern desert has also 2 discoveries for crude oil and finally Sinai area that includes one discovery for crude oil.
Ambitious Projects in the Field of Refining and Petrochemicals:
The oil sector began an ambitious plan to develop and raise the efficiency of the existing refining labs and the establishment of new advanced production units in the existing labs to increase its productive capacity of gasoline, diesel and butane gas. Year 2014 witnessed the beginning of number of new projects where:
- The foundation stone for the expansion of refining lab "Midor in Alexandria, has been laid with investment of $ 1.3 billion in order to increase the refining capacity of the lab with ratio 69%.
- Contracts concerning the establishment of two new units project have been signed to produce the asphalt and butane gas in Suez lab for processing oil.
- The biggest project for petrochemical industry in Egypt has been implemented. It is the complex of ethyelene production and its derivatives in Alexandria. Its production will be started in fourth quarter of 2015 with an investment of about $ 1.9 billion and productive capacity of 460,000 ton ethylene and 400,000 ton of polyethylene per year.
3- Expansion of transferring petroleum Products and natural gas networks
In the field of supporting the infrastructure projects and expansion of transferring petroleum products and natural gas networks the following achieved:
- Implementing 11 new projects for expanding and strengthening the pipeline networks of transferring petroleum products to consumption areas in addition to power stations with investments of about LE 2.4 billion will Join to the service.
- Implementing and operating 5 new projects for transferring the lines of natural gas to strengthen the national network of natural gas and providing the optimal conditions for their operation in order to meet the needs of power stations of natural gas as well as feeding the industrial areas and houses. In addition, implementing and operating Edco-Madia lines projects and Banha electricity, Hurghada and Nubaira electricity as well as Sadat andEdfu were completed.
4- Using Solar Energy in the Oil Sector Buildings
The Ministry of Petroleum during 2014 has taken effective steps for the use of renewable energy in generating electricity in oil sector buildings in order to rationalize consumption and deepen the use of clean energy that contributes to the maintenance of petroleum fuel and generating clean energy to preserve the environment.
To activate the state's trend in this regard, the first project to establish the solar energy stations has been implemented during 2014 to generate electricity in oil sector companies including 37 solar stations with capacity of 2MW where some of them are operated and others will operate lately.
- Successfully, the first two solar stations operated for supplying cars fuel affiliated to Egypt and cooperation for petroleum companies in Cairo Governorate with capacity of KW as firstripe for the dissemination of this project on cars fuel stations.
- The framework convention between Egypt and Cyprus was approved for development of hydrocarbon-bearing reservoir through the intersection of the center line. It was signed in Cairo, December 12,2013.
5- Revitalization of the African Petroleum Institute in Cairo and opening of the new Institute
By Egyptian Initiative, in early 2014 the activities of African petroleum Institute in Cairo has launched for the first time in cooperation with the Egyptian petroleum sector representing in the oil and gas skills company and the Association of African oil producers (ALABA) in order to provide the required training programmes for rehabilitating and training African countries cadres in the field of oil and gas industry.
July 2014 witnessed the opening of the headquarters of the institute officially within the building of the oil and gas skills company.
6- The Government Approval on the Use of Coal Energy
Within the framework of the State's strategy to gain a diverse sustainable energy multiplicity of sources and achieve energy security, the cabinet has approved the use of coal within the energy system in Egypt with the commitment to set environmental and criteria that ensures the safe use of coal as well as expanding the use of renewable energy to reach a certain ratio within the energy in Egypt.
7- Launching the Egyptian Initiative to Maintain the Energy Reasonably
The Ministries of Petroleum and Electricity have launched in cooperation with a number of great foreign companies operating in Egypt, the Egyptian initiative to conserve Energy entitled "Reasonably" in order to raise the public awareness of the importance of the rational use of energy to meet the basic needs of the citizens and maintains the energy resources.
8- Issuance of the New Mineral Resources Law
Mineral Resources sector in December 2014 witnessed a landmark step in its history after the president ratified the decree of issuing the Mineral wealth new law which the Ministry of petroleum and Mineral Resources prepared in order to regulate the exploitation of the mineral wealth and achieve the optimal investment to increase the stat's revenues in addition to raise the participation proportion of mineral resources in Egypt's national income.
9- Singing the First Agreement of Shalateen Company for Mineral Wealth
Within the framework of activating the work of shalateen company for mineral wealth as a company fully owned by the state, the agreement for searching for gold and minerals has been signed under the law that allow for Minister of Petroleum and Mineral Resources to contract with the mineral wealth Shalateen Company and be enforced in the areas of Oiqat Mount, Garf mount, Christ valley, Elba Mount and Aswan region in eastern desert in a total area of 13670km2
10- Arab and Global Development of Petroleum cooperation
Ministries of Petroleum iof Egypt, Jordan and Iraq signed in March 2014 a common cooperation protocol in order to use the surplus energies of Iraqi gas through the establishment of a pipeline across Jordan and linking it with the Arab gas pipeline owned by Al-Fagr, the Egyptian-Jordan Company. In addition, the excess capacity of Iraqi crude oil will be used across a pipeline that will be established across Jordan to export ports in Aqaba on the Red sea.
As investment for the results of presidential summit held in Cairo between Egypt, Cyprus and Greece in November 2014, An agreement was signed to draw a framework for tripartite consultations in order to facilitate dialogue and strengthen the trilateral cooperation in the field of hydrocarbons in favor of their countries and the region as well as discussing all ways and means to achieve optimal development for hydrocarbons resources. Also, the Egyptian and Cyprus agreed to accelerate the discussions concerning the export of Cyprus natural gas to Egypt.
The Egyptian and Algerian sides agreed, during the talks in Cairo in December 2014, to study the establishment of common Egyptian-Algerian Company for searching and exploring oil and gas and produce them in the two countries in addition to discuss the possibility of refining a mixture of Algerian crude oil in Egyptian refining factories.
2015… A Year of Reaping Benefits
The most important features of petroleum and the new projects in 2015 are as follows:
Ras el-Bar, al-Kaser and Hydra Gas Fields
Petroleum sector during 2015 will complete the drawing of the new projects for development and production the natural gas in the map of the production in order to ensure the needs of domestics market at a top of which is Ras El Bar field (phase III) in Mediterranean. It aims to add a new production of the gas with about 180 million cubic day and 400 barrels per day of condensates. Also, the two projects of Al-Kaser and Hedra gas development fields will be completed in Western Desert, where AL-Kaser project aims to compensate the natural contradiction in the productivity of the wells in order to keep the wells production rates to reach 160 million c3/day and 7,000 barrels of condensates per day to compensate the low pressure of Al-Kaser field.
Beginning of Implementation the Major Projects of Natural Gas in the Mediterranean
Year 2015 has witnessed the beginning of implementation of new projects for development and production of gas where the largest project for the development and production of natural gas will be started from deep Mediterranean water in north Alexandria field with investments estimated at $ 9 billion to produce about 1,2 billion cubic feet per day. Also the phase 9B of development west Delta region project in deep water will be started with investments about 1.7$ billion to produce 400 million cubic feet of gas per day.
56 New Agreements to Prospect for Oil and Gas in Egypt
It is expected that 56 agreements to search for oil and gas in Egypt will be enforced during 2015 where 53 agreements were signed until January 2015 with investments about $ 2.9 billion. These agreements are the mainstay of petroleum activities which have placed their hopes in achieving new discoveries and increasing production and reserves of petroleum wealth.
Beginning of Production of two New Petrochemical Projects
During 2015, two new projects of high economic feasibility will be added through the beginning of production of the largest project in the history of Egyptian petrochemical industry, the project of the Egyptian company for producing ethylene and its derivatives "Ethedica" at Amiria in Alexandria with investments of $ 1.9 billion and with production capacity 460,000 tons polyethylene annually and 400,000 tons of polyethylene per year so as to contribute in feeding many industrial fields, especially, plastics industry and its needs from raw materials. Also, the production from the expansion project of MOBCO factory for the production of urea and ammonia will be started the project includes two new production lines with investments of about $ 1.8 billion and production capacity about 1.4 million ton of urea per year to contribute to cover the local market needs from urea fertilizers and export.
Development of Infrastructure for Transporting Petroleum Products to Upper Egypt
During 2015, the petroleum sector began to implement a development and infrastructure expansion plan for transporting the petroleum products through pipelines networks Beni-Suef-Minya with investments L.E.400 million. In addition, number of projects will be completed supporting and expanding the national network for pipeline transportation the petroleum and products and raise its efficiency with a total investment of L.E. 184 million including replacement and renovation project and raise the efficiency of diesel line which feeds Abbu Qeer power station, solar line project Midoor/ AL Dikala and replacement and renovation of crude line chouceir- Mostored.
Second : Natural Gas
National Gas has been used in Egypt since the seventies. Then, the uses increased since the nineties as the best fuels in addition to the steady increase in Egypt's reserves of natural gas. Egypt comes at the forefront of the major exporters of liquefied natural gas .A study prepared by the USg ecological survey in May 2012 have confirmed that there are reserves of natural gas which do not discover in the Mediterranean in Egypt, estimated at about 223 trillion cubic feet.
Natural Gas Projects
The most important implemented projects for the time being are the following: By the mid-2015, it is targeted to achieve the highest rate of providing the natural gas to the houses in Egypt's history where the ambitious plan to connect the gas to 85.000 housing units allover Egypt will be completed. It has implemented from July 2014 until the end of June 2015.
Implementation of gas fields development projects in the Mediterranean areas and Delta with investment of about $6 billion.
Two projects are established for the liquefaction and export of natural gas in Damietta and EdKo for the first time in Egypt in year 2005. The first projects in Damietta with investment of $1.3 billion the second project Edco with investments of $1.9 billion. The total capacity of these two projects is 17.5 billion culic meters per year of liquefied Natural gas.
Petroleum sector succeeded to complete the gas line in Upper Egypt which has a length of about 930km, running from Dahshur in north to Aswan in south through the governments of Beni Suef, Fayoum, Minya ,Assuit,Sohag,Luxor with investments of L.E.5.7 billion.
Expanding in the use of gas locally between 2013 and 2014
In 2014, the natural gas was connected to about 666,000 housing units in various governorates, So, the total housing units that have gas reached 6.3 million housing units since 1981 untill September 2014
The natural gas is connected to commercial customers and industrialists since the start of activity until September 2014 (13654) commercial and 6222 an industrial client in various governorates. 355 factory of bricks has been converted to natural gas. Also, the gas is connected to 5817 bakery in various governorates
- Egypt is one of the leading countries in the use of compressed natural gas as fuel for cars where the number of the converted cars since September 2014 is about 208,000 cars through 74 center and the cars were converted through 181 gas station.
- At the late of nineties, the natural gas is used in operating adaptation devices
Petrochemical industry began in Egypt in the late forties of the last century in Suez city. In the mid seventies, two urea factors were established in Talkha and Alexandria. In the early eighties, petrochemical complex was set up. In the nineties, the petrochemical industry return its activities by establishing Sedi Krier for petrochemical- investment company where petroleum sector is a partner in and Alsharqeon company for petrochemicals which affiliated to petroleum sector. In 2000, it was the real beginning for petrochemicals industry where the national plan was drawn in order to establish petrochemical industry in Egypt.
One of its important features is the establishment of 14 giant complex including 24 projects and 50 production units with investments of $20 billion over 20 years and in three stages to produce 15 million tons per year of final and intermediate petrochemical products that will achieve $15 billion for export or import substitution in addition to provide directly and indirectly job opportunities. In 2001, the decision of establishing the Egypt Holding company for petrochemicals was issued in order to shoulder the responsibility of prompting and supporting investment management and development of the petrochemical industry in Egypt. The company began to implement the first phase of the plan with investment of about $5 billion and produce about 4 million ton per year of petrochemical products.
The most important projects that have been completed the project of acrylic fiber production which began its production in 2006 Alalickl gasoline production project in 2009.