As the rigs go deeper and the stakes get higher, oil and gas companies are demanding more flexible agreements, but can change be enacted fast enough to bring Egypt back from being a gas importer?
Paris-based Observatoire Méditerranéen de l’Energie (OME) estimated that Egypt could become a net importer of gas by 2030 if its production levels and reserves were not improved through major new discoveries, technological breakthroughs and massive capital expenditures.
Today, in 2013, Egypt’s growth in local demand has put pressure on the nation’s domestic supplies and export obligations, leading the nation to an energy crisis. Queues at diesel pumps are becoming the norm, butane tanks are in short supply and late last year, Minister of Petroleum Osama Kamal announced that industrial facilities would import gas as of 2H2013 with factories allowed a ceiling of 1 billion cubic feet a day, according to Bloomberg.
According to OME analysts, Egypt does not lack resources, but lacks the ability to convert reserves to productive capacity faster.
(...) heads of major private and public oil companies operating in Egypt along with government representatives discussed the obstacles hindering the growth of Egypt’s oil production in the future at The Future of Oil & Gas Agreements in Egypt roundtable.
The consensus in the room was that Egypt has almost maxed out its ‘easy oil’ — oil that is easy to find and cheap to extract — and that the future now lies in the production of the more expensive ‘difficult oil.’ (...)
“Is Egypt done with its oil and gas production?” asks Abdallah Ghorab, the former minister of petroleum and the session’s moderator. “My answer is that we have produced the cheap oil and gas and we now have to go further with technology and become more flexible in our pricing to continue production,” he continues.
Flexibility and pricing seemed to be the main topic on the agenda and the number one concern for international oil companies. (...)