FLEXIBLE terms and a sound track record have proved effective in attracting new investment in the Egyptian oil and gas sector. Oil Minister Hamdi el-Banbi says capital expenditure by foreign companies in oil and gas exploration and development will rise to some $2,500 million a year from 1997.
Much of that investment will be in exploration. Two bid rounds in 1995 have resulted in the award of 11 new exploration permits in Gulf of Suez, Red Sea, Sinai, Upper Egypt, the Delta and the Western Desert. Nine more blocks are on offer in the next bid round, which closes on 30 September. The most active companies are those with long attachments to Egypt, including Amoco, Agip, Repsol, British Gas, Shell and Apache/ Phoenix.
Exploration efforts have yielded steady, if unspectacular results, This has kept oil reserves stable at about 3,300 million barrels, and helped boost gas reserves to 24 trillion cubic feet (tcf). Most extra energy demand has been met from fresh gas production, which is currently about 1,300 million cubic feet a day. The government reckons that gas reserves will reach 50 tcf in five years. Oil production has been kept steady at about 870,000 b/d. Roughly half of this is consumed locally, and the remainder is either exported or taken by companies. In 1995, oil and products exports totalled $2,429 million; the oil trade surplus, after imports of $956 million was $1,473 million.
Most of the new field development work is going into gas. Shell, Repsol and Norsk Hydro are just starting a series of new gas development projects in the Western Desert. Agip and Amoco are investing in the development of a number of major gas fields of the east Delta coast. In late 1996, it is expected that work will start on a project to build a pipeline taking gas from these fields to Israel.
There have also been a number of promising oil discoveries in recent months. Agip has found oil in the Raral well in its West Abu Gharadiq concession, in the Western Desert, and Amoco has reported a 4,880-b/d flow in its East Tanka concession in the Gulf of Suez.