EGYPT - The Middle East Non-OPEC Decision Makers - A New Survey - Part 1.

Oil diplomacy has been steadily becoming a more important part of Egypt's overall strategic outlook over the past decade. New gas discoveries and greater foreign investment in hydrocarbons have turned the sector into one of the country's zones of economic potential. But the emphasis is on natural gas, as Egypt is becoming a major producer, while oil production is on a steady decline. Apart from the economic importance, the strategic leverage obtained by gas exports to neighbouring countries in the Middle East will help to consolidate Egypt's role as a leader in the region.

The formulation of energy policy and plans in Egypt is the responsibility of the Supreme Council for Energy (SCE). The President of the Republic, Husni Mubarak, heads the SCE. Its members include the Prime Minister, Dr. Atef Obeid, Petroleum Minister Sameh Fahmi, and Electricity & Energy Minister Dr. Ali Fahmi Al Saidi. In technical matters and preparation of reports, the SCE relies on the Organisation for Energy Conservation & Planning (OECP), which was first formed in 1982 under the name of Organisation for Energy Planning. But OECP's importance has declined considerably in recent years, while the SCE is the highest institution for energy.

Two ministries share control over the energy sector in Egypt: the Petroleum Ministry for the hydrocarbons, and the Ministry of Electricity and Energy for the national energy policy in general and the power sector in particular. Decision making for the hydrocarbon sector involves Egypt's most important institutions in both the executive and legislative arms of the state, politics being a key factor. Major decisions have to pass through the Council of Ministers (cabinet), various state councils, parliament and the president of the republic. Foreign companies intending to invest in this sector need to have a constantly updated who's who in Egypt's leadership.

President Husni Mubarak, who has held the post since 1981, as well as being the Chairman of the SCE, ratifies all major decisions related to the hydrocarbon sector. Without his signature of an "agreement law", no E&P deal can pass even if it has been approved by the People's Assembly (parliament). Such a law authorises the Petroleum Minister to execute the agreement on behalf of the government. The same is true in the case of other types of oil or gas agreements. President Mubarak does not get involved in detailed matters pertaining to oil or gas but he intervenes directly on any matter that is of strategic importance in energy or any other sector.

Prime Minister Dr. Atef Obeid, appointed in October 1999, is the second highest-ranking member of the SCE. Occasionally, he deputises for the president in chairing SCE meetings. It was the SCE which first approved Egypt upstream/downstream gas strategy and Master Plan to the Year 2017.