Official Publication
SHOW DAILY DAY THREE
Wednesday 14 February
DESIGNING THE INDUSTRY’S FUTURE:
COOPERATION, LEADERSHIP AND NEW APPROACHES The first discussion of the second day of the EGYPS 2018 Strategic sessions covered Egypt’s potential to become a regional energy hub. Talking about the viability of investing in the Egyptian energy sector and the possibility of Egypt supplying its own Energy and beginning to export in the region, the speakers were optimistic about the countries chances should the right strategies be implemented. Mohamed Moanes, First Undersecretary for Gas Affairs at the Egyptian Ministry of Petroleum and Mineral Resources, outlined the progress made over the last few years citing the increase of production measuring 4.6 billion cubic feet of gas since the start of 2017. The ministry plans to use the rapid increase in gas production to change consumption in the country, referring to the current subsidies given on fuel to maintain availability to all the population. He also underlined the reasons to invest in Egypt in the current market and said that the ministry has taken measures to make investing in the Egyptian market both easy and accessible. “This is the best time to invest in Egypt.” Maurizio Coratella, CEO of Edison International Spa, detailed his thoughts on Egypt’s capability to become a significant player in the region. He stated that Egypt also has the important infrastructure of pipelines and connections to shores that allow investors to rapidly enter the market. “Egypt has all the ingredients to play the role of hub in the region. It has infrastructure, storage, refineries, fertiliser companies, and its geographical position; these provide the backbone to materialise the project,” Coratella added.
Keith Elliott, Senior Vice President of the East Mediterranean for Noble Energy, underscore three points he thought crucial to Egypt fully realising its potential. Firstly the resources, which as shown by the Zohr gas field and the undiscovered areas in both the Western Desert and the Delta area, Egypt has in plenty. Secondly, infrastructure, which he noted is “advantaged in this region with respect to pipeline infrastructure and LNG infrastructure.” The third and most critical piece to the puzzle is industry and governmental cooperation, citing Egypt as a textbook example in this area due to the ability to begin extraction from the Zohr gas field only two years after its discovery. This sort of thing “only happens when there is a deep cooperation between government and industry. It is an extremely exciting time, both locally and globally to be in the region.” Elliott continued saying that the level on information supplied by the Egyptian government is very satisfactory, as “the access to data and the access to the market” have both been provided to Noble Energy by the Ministry of Petroleum. “The market and infrastructure liberalisation have allowed upstream producers to see cable access to what is now a more fluid market than in the past.” Jeremy Weir, CEO of Trafigura Group, said that Egypt will most likely not fit the traditional model of being either an export or import country. “There is potential for a massive turnaround from importing to exporting in a very short time,” and depending on domestic consumption, Egypt could sit somewhere in the middle of the two. He also said that Egypt is “ideally placed” to serve the energy needs of both the Mediterranean and
growing markets such as India and China, whose need for energy “has been predicted by some to increase up to 400% by 2030.” Weir also gave some insight on the trajectory of gas prices in the near future. “We have seen good growth in the emerging markets, but with this growth a balance will be needed in the case of too much supply.” He sees the possibility of two potential prices depending on whether LNG is competing with oil or coal, “the price will be dependant on that.” The pricing mechanisms of the gas market in China is another affecting factor is another affecting factor, according to Weir.
THIS IS THE BEST TIME TO INVEST IN EGYPT ENG MOHAMED MOANES
First Undersecretary for Gas Affairs at the Egyptian Ministry of Petroleum and Mineral Resources Continued in page 4
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