1. This document is highly confidential. It is intended only for the exclusive use of the recipient and should
not be reproduced or distributed without prior written consent
Egypt Oil & Gas Industry
2. This document is highly confidential. It is intended only for the exclusive use of the recipient and
should not be reproduced or distributed without prior written consent of PICO ENERGY
“Regional Distinguished Energy
Solutions Provider ”
Outline
- Introduction( Egyptian Petroleum Industry Overview)
- Oil :
- Reserves .
- Production .
- Consumption .
- Natural Gas :
- Reserves .
- Production .
- Consumption .
- Conclusion .
2
3. This document is highly confidential. It is intended only for the exclusive use of the recipient and
should not be reproduced or distributed without prior written consent of PICO ENERGY
“Regional Distinguished Energy
Solutions Provider ”
introduction
Egyptian Petroleum Industry Overview
- The Petroleum Industry is one of the most dynamic
industries in the Egyptian Economy .
- Crude Oil Production has been in decline for several years ,
Increasing Oil demands in the future would require Egypt to
increase its P/R ratios above the current ratio of 5.5 % ,or
to pressure down…………which is still……..?
- Egypt is encouraging the Natural Gas sector by …….+…..?
- On the other Hand, Questions persist about the future in
light of the variance in estimates of possible Gas reserves .
3
4. This document is highly confidential. It is intended only for the exclusive use of the recipient and
should not be reproduced or distributed without prior written consent of PICO ENERGY
“Regional Distinguished Energy
Solutions Provider ”
Oil
Reserves :
- Oil Reserves have been increased distinctly in :
(2006/07 [3.7 billion barrels]) (2008/09 [ 4.4 billion
barrels])
- This Jump was due to …….. ?
Exploration Activities , where……? ( Western Desert areas )
when ……. ?
in “ 2006/07 & 2007/08 ” addition of :
- beginning of 2007/08 + - 2008/09
530 million barrels 129 million barrels
4
5. This document is highly confidential. It is intended only for the exclusive use of the recipient and
should not be reproduced or distributed without prior written consent of PICO ENERGY
“Regional Distinguished Energy
Solutions Provider ”
Oil (cont.)
- Trend of High Discovery levels prevailed in
(2006/07 -2007/08 ) (4.89 billion barrels by 2012/13 )
Replacement Ratio(185 % - 2010/11 -2011/12)
- However , Reserve Replacement Ratio had never reached this
high governmental level ; as it previously was :
(86 %) & (95%)
(2008/09) (2009/10)
- (Optimistic scenario )Given = Average Oil success Ratio in
Egypt (Pico R&A calculations ) = 13-17 %} + Given =
Reserve Replacement Ratio <2009/10 > ????? (4.28
billion barrels by (2012/13 )
5
6. This document is highly confidential. It is intended only for the exclusive use of the recipient and
should not be reproduced or distributed without prior written consent of PICO ENERGY
“Regional Distinguished Energy
Solutions Provider ”
Oil (cont.)
Production :
- (2012 /13 ) Oil production is expected to come close to :
672,000 bbl/d – Oil Production/Depletion rate
<2011/12-2012/13>
5.5%
- 693 ,000 bbl/d 2008/ 09
= Growth Rate = (0.87) %
687,000 bbl/d 2009/10
This is out of same Depletion Rate (2008/09 – 2010/11 ) + Oil
Reserves were decreasing
6
7. This document is highly confidential. It is intended only for the exclusive use of the recipient and
should not be reproduced or distributed without prior written consent of PICO ENERGY
“Regional Distinguished Energy
Solutions Provider ”
Oil (cont.)
Petroleum Products
Consumption :
- PPC in EGYPT has an ever increasing trend ,Despite of Oil
Production rates decreasing < 2008/09-2009/10 >
- Gas Oil 38% & Fuel Oil 29% { main pp }
Gasoline 14% & LPG 13%
- 3 main economic sectors :
Transportation 30%
Electricity >67% 17%
Industry 20%
7
8. This document is highly confidential. It is intended only for the exclusive use of the recipient and
should not be reproduced or distributed without prior written consent of PICO ENERGY
“Regional Distinguished Energy
Solutions Provider ”
Oil (cont.)
- In view of what’s mentioned in the previous slide , Total PPC
reached :
230 million barrels 245 million barrels
(2008/09) (2009/10)
6.5%
- Most of this increase occurred mainly in favor of the Gas , Oil
, Fuel Oil & LPG , While the consumption of Kerosene and
Gasoline has relatively remained constant .
- Gas Oil, Fuel Oil & LPG witnessed relatively high consumption
growth rates of 6.2 %,5.5% &6.3% respectively over the
period of (2008/09 – 2009/10 ) despite the continuation of
the Natural Gas substitution policy that started in
(1998/99) for Gas Oil and Fuel Oil ;& in (2007/08) for LPG .
8
9. This document is highly confidential. It is intended only for the exclusive use of the recipient and
should not be reproduced or distributed without prior written consent of PICO ENERGY
“Regional Distinguished Energy
Solutions Provider ”
Oil (cont.)
- This increase in demand
Economic growth of different + High heat summer waves
producing sectors in EGYPT prevailed since (2008/09)
Total real GDP grew more Fuel Oil input was
4.7% 5.2% required for the Electricity
(2008/09) (2009/10) generation demand which
rose with 12% over the last
2 years (2008/09-2009/10)
- On the other side, Natural Gas Production plans didn’t match
up the increasing demand from those sectors delays
in drilling schedules .
9
10. This document is highly confidential. It is intended only for the exclusive use of the recipient and
should not be reproduced or distributed without prior written consent of PICO ENERGY
“Regional Distinguished Energy
Solutions Provider ”
Oil (cont.)
- Although assuming a relatively low growth rate of GDP for
the coming two years of 2.5% , total PPC is expected to
reach 260 million barrels by 2012/13 , This implies a growth
rate of 2.1% for PPC as compared to 249.67 million barrels
in (2010/11)
10
11. This document is highly confidential. It is intended only for the exclusive use of the recipient and
should not be reproduced or distributed without prior written consent of PICO ENERGY
“Regional Distinguished Energy
Solutions Provider ”
Natural Gas
11
Reserves :
- EGYPT’S proven Natural Gas reserves were last estimated at:
79.7 TCF in (2010/11) 1.92%
78.2 TCF in (2009/10) Increase of
- Decrease in the no. of new discoveries
Decrease in the level of investment
Downturn in EGYPT’s Natural Gas reserves rate starting from
(2008/09) , despite the yearly increase in the levels of
reserves .
12. This document is highly confidential. It is intended only for the exclusive use of the recipient and
should not be reproduced or distributed without prior written consent of PICO ENERGY
“Regional Distinguished Energy
Solutions Provider ”
Natural Gas (cont.)
- The Decrease in incoming investment levels was the direct
result of the late payments made by Engineer’s SAMEH
FAHMI Ministry to Exploration & Production companies .
- After examining the previous growth trend
+
taking into consideration fluctuations
+
the expected future increase in incoming investment level as
faith in the country’s stability returns
=
The R&A projects reserves to grow in (2011/12) by 2.5 % and
in (2012/13) by 3.5%
12
13. This document is highly confidential. It is intended only for the exclusive use of the recipient and
should not be reproduced or distributed without prior written consent of PICO ENERGY
“Regional Distinguished Energy
Solutions Provider ”
Natural Gas (cont.)
13
Production :
- 2.3 TCF ( 2009/10)
2.4 TCF (2010/11 ) , So it rose by 4.3%
- (2009/10) , The government was forced to increase Natural
Gas production ,……why ??? Sharp increase in
domestic consumption mainly in :
Petroleum sec. Industrial sec. Electricity sec.
11% 9% 6%
Production Growth rate peaked to reach 9.5% ,………when?
14. This document is highly confidential. It is intended only for the exclusive use of the recipient and
should not be reproduced or distributed without prior written consent of PICO ENERGY
“Regional Distinguished Energy
Solutions Provider ”
Natural Gas (cont.)
- Repeated attacks on the Arab Gas Pipeline (AGP)
Reduction in Pipeline Exports + Low incoming investment rate
= R&A PROJECTS FOR Production Growth rate to increase by
3% in (2011/12), Despite the expected increase in domestic
consumption .
- Demand continues to + stability progresses leads to ……?
= production is projected to grow by 6% in (2012/13)
14
15. This document is highly confidential. It is intended only for the exclusive use of the recipient and
should not be reproduced or distributed without prior written consent of PICO ENERGY
“Regional Distinguished Energy
Solutions Provider ”
Natural Gas (cont.)
Consumption :
- (GOE) has set a policy in 2007 for encouraging the
substitution of LPG by Natural Gas. Accordingly,
consumption in EGYPT has witnessed an upward slope over
the past five years to reach 54% of the total domestic
consumption of hydrocarbons.
- EGYPT’s total domestic consumption rose by 7.1% , as in :
(2009/10) = 1.55 TCF (2010/11) = 1.66 TCF
- R&A projects the growth rate of domestic consumption to
average at 9.5% annually , According to planned launch of
new factories & other expansions .However , the revolution
may negatively affect the actual application of agreements
from either side .
15
16. This document is highly confidential. It is intended only for the exclusive use of the recipient and
should not be reproduced or distributed without prior written consent of PICO ENERGY
“Regional Distinguished Energy
Solutions Provider ”
Conclusion
- GOE is exerting a lot of efforts under it’s new policy of
Natural Gas substitution that started in (1998/99) for Gas
Oil & Fuel Oil & (2007/08) for LPG in terms of expanding
it’s exploration & development activities of reserves of both
Crude Oil & Natural Gas & new Expansions , factories &
plants launching .However, The consumption of Crude Oil &
LPG is still high & the reserves of Crude Oil is decreasing &
for Natural Gas is increasing but by small rate due to the
decrease of level of invetsment .
- The financial crisis in the international level & repeated
attacks on the Arab Gas pipelines , Annually High heat
summer waves , 25 January Revolution on the domestic
level affect the market of the industry of Oil & Gas in EGYPT
negatively .
- The question here is how to activate that policy of
substitution in the light of all the factors mentioned above ?
16
17. This document is highly confidential. It is intended only for the exclusive use of the recipient and
should not be reproduced or distributed without prior written consent of PICO ENERGY
“Regional Distinguished Energy
Solutions Provider ”
17
References : Report named ( EGYPT Oil & Gas industry
overview )
Thank You
Questions !