Egypt’s increasing local oil consumption on the back of a considerable industrial base, has left the country without sizeable excess of oil for exports. The increasing exploration activities, which further boost the country’s proven oil reserves, ensure at least the coverage of annual increase in oil consumption.
In 2007, Egypt’s oil proven reserves rose by 9.4%, from the 2006 level, to reach 4.1 billion barrels. Egyptian oil assets are not considerably high, compared to other regions, but the country still stands sixth overall in Africa with 3.5% of the continent’s proven reserves.
Egyptian oil production suffered a 10 year decline from 1996 until 2006. Production stabilised that year and picked up again in 2007, reaching 710 thousand barrels per day (tbpd), a 1.9% year on year increase.
In 2007/08, Egypt exported approximately 58.7tbpd, a decrease of 32.8% from 2006/07. However, the surge of oil prices to an average of US$101 per barrel, has consequently increased the proceeds of the crude oil exports to reach $5.1bn in 2007/08, 57% higher than the previous year.
At the same time, however, crude oil imports bill surged by 226%, to reach an unprecedented $5.1 billion compared to $1.6 billion in 2006/07. With the current international crude oil prices to below $45 per barrel, both the imports and the exports bills should decrease substantially.
There are four refineries currently under construction in Egypt, with two more planned. The local and foreign investments in the Egyptian oil sector (as of June 2008), reached an unprecedented $6.6 billion, an 86.6% increase over 2006/07 level.
The Egyptian government plans to increase oil explorations and discoveries, as well as encouraging the private sector to further emerge in the hydrocarbon sector investments.
As a result Egypt will be able to satisfy its growing oil consumption by increasing oil production, to avoid a net importing situation.
This report was taken from Egypt, Economic & Strategic Outlook – Oil Sector that was released by Global Investment House in Kuwait. For more information click here
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