Egypt’s Minister of Petroleum and Mineral Resources, Karim Badawi, has outlined key priorities for the ministry during the American Chamber of Commerce in Egypt (AmCham Egypt) monthly luncheon on November 18, emphasizing the need to boost local production alongside ongoing exploration activities.
Badawi introduced six main pillars that guide the ministry’s efforts. The first pillar focuses on meeting the local market’s needs for petroleum products, which requires maximizing production and exploration activities.
The second pillar aims to leverage Egypt’s abundant petroleum resources and infrastructure to unlock added value through refineries and petrochemical industries. By capitalizing on these resources, Egypt can export petroleum products and generate foreign currency, Badawi asserted.
The third priority involves revitalizing the mining sector to increase its contribution to the economy. Currently, the mining sector accounts for 1% of Gross Domestic Product (GDP), but the ministry aims to raise this figure to 5%–6% in the coming years.
A crucial aspect of achieving these goals is delivering an optimal energy mix. Badawi highlighted Egypt’s strategic position for hydrogen production and energy trading, expressing a shared ambition with the Ministry of Electricity and Renewable Energy to generate 42% of the country’s energy from renewable sources by 2030.
The fifth focus area is creating an attractive investment environment while ensuring safety, energy efficiency, and emissions reduction. Finally, the ministry aims to enhance regional cooperation to attract investments, solidifying Egypt’s role as a regional gas hub.
Addressing challenges
Badawi also discussed the significant challenges hindering growth in the oil and gas sector. He noted that he spent his initial weeks in office assessing the difficulties Egypt faces in these industries, stressing the importance of identifying necessary actions.
One major challenge has been the increasing receivables owed to international oil companies, which have negatively impacted exploration and production activities over the past 30 months. Badawi remarked, “The accumulation of arrears over the last 30 months has been a turning point in what unfolded next.”
He explained that currency devaluation and rising petroleum prices have complicated the repayment of outstanding debts to foreign oil companies. To address this issue, the ministry is committed to implementing a periodic payment mechanism to ensure stable cash flows for its partners and settle receivables in the near term.
Another pressing challenge is the decline in domestic production. Over the past two years, natural gas production has decreased by 25%, while oil production has fallen by 10%. “Egypt has never been self-sufficient in oil,” Badawi stated, highlighting the country’s ongoing reliance on imports to meet its oil requirements. This recent decline has intensified the need for imported petroleum products, complicating the repayment process for foreign partners.
To boost domestic consumption, the ministry is enhancing exploration efforts by offering new investment opportunities and accelerating the development of recent discoveries through an incentive package for partners.
