وزير البترول: "نعمل على جدولة مستحقات الشركات الأجنبية وتوفير الوقود للكهرباء"

Engineer Karim Badawi, Minister of Petroleum and Mineral Resources, delivered the ministry’s statement before the parliamentary committee responsible for reviewing and discussing the new government’s program. It read: At the beginning of my speech, I am honored to be with you during the launch of the parliamentary committee meeting formed to discuss the government’s program. I would also like to thank President Abdel Fattah El-Sisi and Prime Minister Dr. Mostafa Madbouly for the trust granted to me to assume the position of Minister of Petroleum and Mineral Resources.

I would also like to thank the Chairman of the Committee, Counselor Ahmed Saad El-Din, First Deputy Speaker of the House of Representatives, and Mr. Mohamed Abu El-Enein, Deputy Speaker of the House. At the same time, I appreciate the size of the responsibility placed on my shoulders, as I appreciate the aspirations of the Egyptian people from the petroleum and mineral resources sector to provide the energy needs of citizens and various state sectors, as energy is the backbone of daily life and the locomotive of development in Egypt at various levels, which contributes to achieving Egypt’s Vision 2030. I would also like to emphasize and commend the efforts and achievements that have been made over the past nine years.The past under the leadership of Eng. Tarek El Molla, to whom I extend my sincere thanks for meeting me on the day of the oath-taking to congratulate me on assuming the position with all professionalism and expertise, which confirms that Egypt is a state of institutions.

Priorities of the current stage

I would like to emphasize that I and all those working in the sector place at the top of our priorities in the current stage the continuation of coordination and cooperation with the Ministry of Electricity and Renewable Energy to provide the necessary fuel supplies to operate power plants, and coordination with foreign partners to schedule and pay overdue dues to encourage partners to pump more investments with the aim of increasing production of crude oil and gas as soon as possible and finding incentive mechanisms to increase production programs and accelerate exploration programs, which achieves the common interests of both parties, as well as moving forward in attracting foreign investments in the short term by adopting a new investment idea that contributes to the full exploitation of the sector’s capabilities from refining plants, petrochemicals and mineral resources, in addition to maximizing the benefit from modern capabilities of digital transformation and artificial intelligence technologies in various activities of the sector. The Minister added,  I would like to clarify some principles that I will adhere to, whether at the sector level or in dealing with the House of Representatives and all ministries and other entities, which are: complete transparency in presenting various topics, frankness and presenting the situation with utmost clarity in terms of positives and challenges, and the plans in place to deal with those challenges, integration and teamwork with various ministries and entities according to each topic, cooperation with the House of Representatives, the Energy Committee and various committees as partners towards achieving one goal, benefiting from the various experiences and ideas from various entities and not excluding any opinions or ideas and continuous encouragement of Innovation, creativity and presenting new ideas in various sites and activities of the sector, and communicating regularly with the press and media to present the latest developments in the activities and projects of the petroleum and mineral resources sector, and committing to conducting continuous field visits to all sites of the sector, whether through me or through all leaders in the sector, and paying attention to direct communication with workers in all work sites affiliated with the sector and listening to them and introducing them to the sector’s vision, and motivating them to exert more effort to achieve that vision, as well as fully committing to establishing occupational safety and health standards, and working forward on environmental sanitation related to the sector’s activities in various sites and enhancing efforts to remove carbon and reduce emissions, stressing the keenness of the Ministry of Petroleum and Mineral Resources to take into account the environmental dimension in the sector’s activities and the “issue of climate change and energy transformation” comes at the top of the priorities of the petroleum sector within Egypt’s strategy for sustainable development. Badawi stressed the importance of human energies at all levels, especially young expertise, to create a strong base of young leaders, while benefiting from the great expertise of the stature that contributed to the success of the sector over the past years. He added, within the framework of the strategic goal concerned with empowering women and promoting equal opportunities in all fields, I affirm my belief in the importance of the role of women and my confidence in their efforts as a main partner in construction, work and success, due to their prominent role in building and advancing societies.

The Ministry’s plan within the government’s work program

The Minister presented the Ministry of Petroleum and Mineral Resources’ plan within the government’s work program, and began by clarifying the challenges we face, which will require collective work from the Ministry of Petroleum and Mineral Resources’ work team and all government ministries, and the support of your esteemed council, and above all, the Egyptian citizen. Increasing production is a top priority. The Minister stressed that increasing production comes first, explaining the current situation. The growth in consumption in light of the state’s efforts to build the new republic through modernizing the infrastructure, unprecedented urban expansion, clean transportation projects, adding a number of giant power stations, expanding industrial zones, increasing energy-intensive factories, and a decline in the production of crude oil and natural gas from current production areas by up to 25% during the past three years, and the increase in the value of partners’ dues, which led to a decline in the pace of exploration and development plans and resorting to imports to bridge the gap between production and consumption. He explained the challenges in production activity, represented in paying partners’ dues and motivating them to implement development and exploration plans, and increasing global exploration and development activity, which leads to an increase in demand for offshore drilling rigs and equipment required for exploration activities, intense competition, and the aging of producing fields. He reviewed plans to overcome the challenges, including restoring confidence in partners by agreeing to pay dues in exchange for partners continuing to pump necessary investments into research and development activities, and as stated in the program for diversifying the national energy mix – focusing on increasing production of natural gas; To enhance reliance on clean energy sources, there is a need for incentive mechanisms in current and new commitment agreements to encourage partners to accelerate the implementation of exploration and development activities and coordinate with all parties to expedite procedures and reduce the time period for issuing commitment laws and seeking the help of companies with global experience in developing some reserves that are difficult to develop economically and offering areas that can be developed quickly to some partners for contracting and reviewing plans to develop the fastest alternatives and obsolete fields to determine priorities to accelerate their entry into production plans until the rest of the production areas enter successively.

Stimulating investment in exploration and field development

 With regard to exploration activity, Badawi explained that there are currently 145 commitment agreements in force in the field of oil and gas exploration and research concluded with 40 partners and it is planned to drill 110 exploratory wells for gas and oil with total investments of $1.2 billion during the fiscal year 2024/2025. As well as drilling 586 exploratory wells for gas and oil with total investments of $7.2 billion until 2030. He pointed to the challenges in exploration activity, most notably regional competition to offer investment opportunities and accompanying economic incentives and the slowdown in the implementation rates of research and exploration activities. He explained the plans. Overcoming challenges in exploration activity by setting new incentives for current and future opportunities, including unconventional reservoirs, preparing a global marketing plan to attract new investments, and launching global bids through the Egypt Exploration and Production Portal, which focuses on making data available digitally at all times to partners, and continuing to offer new areas to international companies with a new methodology by providing opportunities to investors throughout the year through the Egypt Exploration Portal.

Maximizing the exploitation and operation of the sector’s resources at full capacity

With regard to maximizing the exploitation and operation of the sector’s resources at full capacity to increase the state’s income from foreign currencies, he explained that the Egyptian state has giant refineries and strategic storage areas with unprecedented capacities, petrochemical complexes, oil and natural gas transportation networks covering all parts and linked to neighboring countries, and oil ports to trade and store all products. A floating refueling storage unit has been rented at SUMED Port in Ain Sokhna. He added that the challenges in this context are the need for additional quantities of natural gas to meet needs and operate refineries and petrochemical plants at full capacity and exploitMaximum capacity of storage capacities and oil and natural gas transportation networks. He presented plans to overcome challenges, noting that studies are underway to add another floating storage and regasification unit in Ain Sokhna, with the possibility of using the current liquefaction facilities in the Damietta and Idku regions in reverse. In line with the objectives of the sub-program for the development and advancement of the petrochemical industry, projects are being implemented to increase petrochemical manufacturing capacities to reach 170% of the current design capacities, and to work on finding mechanisms to exploit surplus production capacities and present them to investors, whether current or new partners, and to work with neighboring regional countries to increase the exploitation of these capacities, whether at the level of countries or companies, which achieves on the ground the maximization of Egypt’s role as a regional center for energy trading. He added that it is planned to increase Egypt’s exports of petroleum products resulting from refining and petrochemical projects in order to reduce the trade balance deficit and bring the value of exports to $8.6 billion.

 Rapidly dealing with the gap between resources and uses

On the rapid dealing with the gap between resources and uses so that the petroleum sector continues to support the national economySustainability of partners’ work and attracting sustainable investments  The Minister explained the widening financing gap due to the increase in global prices, the movement of the exchange rate and the decrease in the selling price for all sectors and consumers compared to the cost, which caused a large deficit in the balance of payments of the petroleum sector. He pointed to the challenges of the rise in global prices of natural gas and oil and the movement of the exchange rate of foreign currencies, which led to an increase in the cost of providing petroleum products and the selling price of products in the local market and the large difference compared to the cost. He explained the plans to overcome the challenges  which are working to rationalize consumption to the maximum extent possible, increasing the efficiency of the production system to reduce the cost of producing a barrel, creating a sustainable investment environment for partners and investors in the sector and working with the government to reach fair prices for selling petroleum products.

Enhancing Egypt’s role as a regional center

And about  Strengthening Egypt’s role as a regional center Badawi explained that Egypt enjoys a distinguished geographical location that qualifies it to be a regional center for energy trading, in addition to the availability of a strong infrastructure of storage areas, pipeline networks, liquefaction facilities, refineries, petrochemical plants and their derivatives. It is also linked by pipelines with neighboring countries at more than one point, which qualifies it to be a center for collecting East Mediterranean gases. Work is underway with neighboring countries to absorb all future production in excess of their needs to be received through existing and future facilities and to enhance the role of the East Mediterranean Gas Forum in expanding the frameworks of international cooperation to secure energy resources with neighboring countries, and to work on increasing the connection lines with other neighboring countries to maximize the benefit from Egypt’s capabilities.

Continuing to develop the performance of the mining sector

With regard to the mining sector, the minister explained that within the framework of working to develop the performance of this sector and exploit the diverse mineral resources in Egypt and expand extractive industries, work will be carried out on several axes, including transforming the Mineral Resources Authority from a service to an economic one. To help attract specialized cadres and launch the role of the Authority, and periodically launch auctions for research and exploitation of gold and minerals, and intensify efforts to confirm reserves of various mineral ores, and launch the digital transformation project and the digital investment platform for gold and minerals, and prepare an aerial survey program in Egypt to create a map of the places containing minerals while building on previous efforts, in addition to promoting investment opportunities in the Egyptian mining sector in international forums, most notably the Egypt Mining Forum. The Minister pointed out that the current volume of gold production during the fiscal year 2023/2024 amounted to 559 thousand ounces, targeting to reach 800 thousand in 2030, while the volume of mineral ore production amounted to more than 17 million tons, targeting to increase to 30 million in 2030.

The petroleum sector is moving towards implementing green economy projects

The Minister confirmed that the petroleum sector is moving towards implementing green economy projects through a package of projects currently under actual implementation or study, including Production of green ammonia, bioethanol, production of medium-density fiberboard (MDF) from rice straw, and sustainable aviation fuel (SAF) from used cooking oil, in addition to projects to improve energy efficiency and reduce carbon with the aim of reducing carbon emissions by 2.5 million tons annually in 2030 at an investment cost of $2 billion, noting that work is underway to address the challenges of establishing these projects by enhancing cooperation with all parties to provide soft financing available from financing institutions and international bodies for the benefit of developing countries in order to implement green projects and reduce emissions, as well as working to find non-traditional sources of financing for projects such as carbon certificates and others.

Moving forward in digital transformation Badawi pointed out that the implementation of the digital transformation strategy and action plan in the petroleum and mineral resources sector is proceeding to raise efficiency in performance, support decision-making and face challenges. Among the most important projects of the Ministry of Petroleum and Mineral Resources in the field of digital transformation is the Egypt Upstream gateway (EUG) to market oil and gas exploration areas globally in 2021, with the aim of providing all the required geological data to current and potential investors, promoting bids and attracting investments in the field of oil and gas exploration and research in Egypt.

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