During the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC), Egyptian Minister of Petroleum and Mineral Resources, Tarek El Molla, joined a panel on Global Ministerial Dialogue for empowering emerging markets.
El Molla stated that Egypt will become self-sufficient in gas, with little exports by the fiscal year 2020/2021. He added that Egypt has a competitive edge as a gas exportation hub due to its “geographically fantastic location” and proximity to various markets, specifically the Middle East and East Mediterranean, coupled with current gas infrastructure in terms of available LNG plants and the Suez Canal. Furthermore, he stated that the country is planning ahead to optimize the use of gas in petrochemicals through two important plants in Alexandria and Damietta, with three other petrochemical projects under development.
El Molla touched on the subject of fuel subsidies, stating that Egyptian government has been committed to economic reforms. Accordingly, the country had a 5-year program to gradually lift energy subsidies with a focus on pump prices and electricity. He added: “We are still committed to the five years so in the remaining two to three years maximum we eliminate or reduce the subsidies eventually.” El Molla explained that fuel subsidies had eroded Egypt’s petroleum resources due to excessive consumption, turning the country to fuel imports after it was once a net exporter.
Furthermore, the minister stated that subsidized energy had halted the progress of renewables, adding that “this has delayed all efforts for renewables, because it was not economical when compared to subsidized traditional energy production, it was not worth it.” El Molla declared that Egypt aims to produce 30% of its power from renewable resources by the year 2023. Additionally, he said that Egypt can benefit from subsidies’ lessons learned from “our brothers in Gulf countries,” in implementing citizens’ awareness programs to promote more efficient consumption of fuels.
El Molla concluded that Egypt is moving towards free-market dynamics, and that the devaluation of the Egyptian Pound has improved the “attractiveness of the business environment in Egypt,” especially for the upstream segment of the oil and gas market. Pump prices of high octane petrol, namely Octane 95, has been completely liberated by cutting all subsidies for this products and setting the prices based on international rates.
El Molla noted that within the first half of 2017, Egypt will have an independent gas regulator that will interact with private marketing firms and ensure that all the dynamics of a free market for gas is implemented.
El Molla was joined by United Arab Emirates’ Minister of Energy, Suhail Mohamed Al Mazrouei, the Pakistani Federal Minister for Petroleum and Natural Resources, Shahid Khaqan Abbasi, and Indonesian Vice Minister of Energy and Mineral Resources, Arcandra Tahar. The discussion was moderated by Sky News Arabia’s Malak Fares.
ADIPEC is being held at the Abu Dhabi National Exhibition Center, from 7th to 10th November 2016. It provides an unrivalled global platform for oil and gas professionals to do business. The world-renowned conference program further educates and provides knowledge transfer and unparalleled network working opportunities.