EGYPS 2017: Now is the Time for Egypt
The first annual Egypt Petroleum Show (EGYPS) saw energy industry bigwigs flock to Cairo to hear a resounding message of confidence in Egypt’s ability to capitalize on its hydrocarbon resources, given positive recent reforms and the interest of the international investment community.
“Overall, the Ministry [of Petroleum and Resources] is targeting a staggering USD 30 billion in new investments.”
Despite being the region with the cheapest oil, the Middle East has been the hardest hit by the 2015 crash in oil prices, with countries across the region forced to conduct a serious bout of industrial soul-searching in order reduce their reliance on their shrinking petroleum wealth. Egypt is no exception and additionally, it has to contend with the consequences of recent political instability. Nevertheless, the country seems determined to revitalize its economic development, having implemented a series of substantive measures like the July 2016 civil service legislative reform and the November 2016 devaluation of the Egyptian pound, which secured it a much-needed USD 12 billion loan from the International Monetary Fund (IMF).
Now the country is focusing on the oil and gas sector, as one of the most important pillars of the Egyptian economy. The Ministry of Petroleum and Mineral Resources, under the leadership of H.E. Minister Tarek El Molla, has spearheaded a new Modernization Program designed to transform the Egyptian oil and gas sector into a world-class organization. This was unveiled with sufficient pageantry at the first ever Egypt Petroleum Show (EGYPS) 2017, held from February 14 to 16, which saw a veritable list of who’s who in the global oil and gas industry descend on Cairo for three atypically showery days.
Heralded as the gateway to Egypt’s oil and gas opportunities, the event was testament to Egypt’s full-bodied commitment to charting a new course for its energy and economic development – and accordingly, was inaugurated by H.E. President Abdel Fattah El Sisi, President of the Arab Republic of Egypt himself, flanked by H.E. Prime Minister Sherif Ismail as well as H.E. Dr. Sultan Ahmed Al Jaber, representing the UAE as Minister of State and also Group CEO of the Abu Dhabi National Oil Company (ADNOC).
H.E. Minister El Molla also took the occasion to lay out the key tenets of the Modernization Programme, which will help Egypt meet its own domestic needs, increase foreign investment, and even allow Egypt to resume its role as a gas exporter within the next few years. Overall, the Ministry is targeting a staggering USD 30 billion in new investments.
Against the recent background of depressed E&P activity, Egypt has maintained a notable vibrancy in its upstream sector, working with IOCs like Apache, BP and Eni. This was evident in the impressive turnout of global executives keen to express their support for and confidence in Egypt, with the likes of Bob Dudley, Group Chief Executive of BP; Claudio Descalzi, CEO of Eni; Catherine MacGregor, President (Reservoir Characterization Group) of Schlumberger; and Jean Cahuzac, CEO of Subsea 7 speaking on strategic panels.
Going beyond industrial reform, Egypt has also boldly set out the ambition to become an Eastern Mediterranean energy hub, capitalizing not only on its upstream potential but existing transport infrastructure like the Suez Canal and the SUMED pipeline and the investments that Egypt is pouring into downstream developments. Mohamed El Masry, Chairman for the Egyptian Natural Gas Holding Company (EGAS), commented that increasing gas production in Egypt, now more than ever a reality thanks to the Zohr supergiant discovery, will be an indispensable component of this project. Mohamed Saafan, Chairman for the Egyptian Petrochemicals Holding Company (ECHEM), also emphasized that Egypt will not overlook the downstream sector, as the success of Egypt as a future energy hub will also depend on the available downstream infrastructure.
Most speakers struck a very laudatory note on the reforms that Egypt is currently undergoing and commended the Minister of Petroleum for organizing a successful event and outlining a clear reform program. What was particularly noteworthy, however, was the general atmosphere of camaraderie pervading the event that allowed stakeholders to speak not only with conviction about the opportunities that laid ahead in Egypt’s future, but with constructive frankness about the challenges that Egypt should be prepared for. For instance, Lawrence Kearns, Director Lubricants for Europe, Africa and Middle East (EAME) for ExxonMobil, cautioned that “operation integrity is critical for the sustainability of the business”, both understanding the risks and providing the resources to mitigate them as ultimately, “safety and security make a difference in the performance of the business”, before reaffirming ExxonMobil’s commitment to contributing to Egypt’s further development. In the same vein, Momar Nguer, President of Marketing and Services & Member of the Executive Committee for Total, highlighted that, as the market leader in North Africa, they are able to leverage on their integration to act more as solution providers to address the needs of their customers – all reassuring signs that the supermajors continue to regard Egypt positively.
With the organizer, dmg events, already anticipating that EGYPS 2018 will be twice as big, the key message of EGYPS 2017 was overwhelmingly clear: now is the time to come to Egypt.
Writer: Karen Xi