Part 1 - Egypt.
Egypt's oil production has fallen from a peak of 950,000 b/d in the third quarter of 1995 to less than 750,000 b/d by 2001 and the annual average for 2002 was estimated to drop to about 720,000 b/d. No longer active among non-OPEC exporters trying to defend the oil price, Egypt is hoping that its domestic dependence on oil imports would be limited in the coming years by a rapid rise in the use of natural gas produced in the country. Nevertheless, Cairo is not keen on seeing oil prices fall. This is because a low oil price would discourage foreign companies from investing in Egyptian oil exploration and the country's future gas exports will depend on the market value of fuel oils.
The decision makers in Egypt's petroleum sector are professionals with long experience in the business. Most of them are pragmatic and flexible, led by Sameh Fahmi who is the minister of petroleum. The decision makers are clear and cohesive about the shift of emphasis in favour of natural gas. This applies not only for the state-owned Egyptian General Petroleum Corp. (EGPC) and the Egyptian Natural Gas Holding Co. (ENGHC), but also for the main foreign operators in the country. The political leadership, under President Husni Mubarak, is not directly involved in the running of the petroleum sector.
The key organisation under the Petroleum Ministry is EGPC, with a total of about 75, 000 people now working in the state's hydrocarbon sector under the ministry's control. EGPC is one of the biggest NOCs in the Middle East and Africa. Although the gas sector has been spun off to ENGHC and the petrochemical sector to a similar holding company, EGPC remains a huge concern. It is integrated with major upstream and downstream oil operations. It functions as a holding group and has almost 30 operating subsidiaries and affiliates.
EGPC was established in 1962 as an evolution from the General Petroleum Authority, which was created in 1956. It grew rapidly as it became in charge of 50-50 E&P ventures with Amoco (now part of BP), Agip and many other foreign companies. The government in 1964 nationalised the sole oil concessionaire, Anglo-Egyptian Oilfields (Shell-BP). The assets of this company were taken over by General Petroleum Company (GPC), which was also created in 1956 and is now one of EGPC's subsidiaries. EGPC controls all or part of the capital of all companies in Egypt's oil sector. It holds 50% in all the oil producing joint ventures which are operated by foreign and some Egyptian companies. These JVs are all headed by EGPC executives appointed by the Petroleum Minister.
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|Publication:||APS Diplomat Operations in Oil Diplomacy|
|Date:||Jan 27, 2003|
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