Egypt Petroleum

Egypt Petroleum

Egypt sits atop 4.4 billion barrels of crude oil in place, and produces 650,000 b/d of crude oil and liquids.

Egypt is the 6th largest owner of oil reserves in Africa and the largest non-OPEC oil producer in the continent. With a rated refining capacity of 720,000 b/d, Egypt is known as the largest African refiner. Furthermore, due to enjoying the Suez Canal and a 200-mile pipeline, the country remains the largest supplier of crude oil from the Persian Gulf to Europe and America.

Offshore oil reserves account for half of the Egypt oil reserves. Currently more than half of Egypt’s crude oil production is supplied from the Gulf of Suez. The Eastern Desert, Western Desert and Sinai Peninsula regions are among the major producers of oil in Egypt. Based on estimates, Safaga Quseir in Eastern Desert contains 4.5 million barrels of oil, while Abu Tartour in Western Desert holds 1.2 million barrels of shale oil.

Egypt was once a major player in oil supply in the world, but over recent years its production has declined significantly and the country has turned into a net- importer, i.e. an exporter has simply become an importer.

Egypt’s refining industry is a state-run industry. Of a total 10 refineries in Egypt, only one belongs to the private sector.However, Egypt imported oil products worth $ 6.2 billion in 2016 and oil products worth about $7 billion in the first three quarters of 2017. Petroleum products account for 38% of Egypt’s total imports.

Under a long-term five-year agreement, Saudi Arabia will be exporting 700,000 tonnes a month of oil products to Egypt. Kuwait will be also exporting 1.5 million tonnes a year of oil products and 2 million barrels per month of oil to Kuwait. Furthermore, Kuwait Energy has invested in Al Jahra field in Western Desert.

Egypt’s state-run Middle East Oil Refinery Co. (Midor) was established in 2007 to help meet domestic demand. It has been seeking to upgrade refineries in order to strike a balance between supply and demand in oil products consumption.

Egypt is currently able to meet only 65% of its domestic needs. The country depends on imports for the rest, which amounts to 300,000 b/d.Given the growing consumption trend in Egypt and no significant increase in supply, imports are expected to go upward.The important point in Egypt’s refining industry is that all refineries in Egypt are facing technical problems and have decrepit installations. Therefore, they are treating crude oil below their capacity and all products may not be exported.Egypt is seeking to enhance its refining capacity, but optimization of refineries has been delayed.

In case the current circumstances remain unchanged in Egypt’s refining industry, the country is unlikely to see any significant jump in production and refining in the short and mid-term. It will only have to strike a balance to production and refining on one side and consumption, on the other. Oil analysts believe that these objectives are hard to be achieved due to numerous reasons including economic issues.

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