SPEECH BY: H.E ENG. TAREK EL MOLLA Minister Of Petroleum And Mineral Resources

Transcription

1 Z SPEECH BY: H.E ENG. TAREK EL MOLLA Minister Of Petroleum And Mineral Resources May, 2017

2 Content Oil & Gas Sector from 2011 till Oil & Gas Modernization Project. Oil and Gas Sector Strategic Pillars and Action Areas Boost Oil & Gas Reserves & Production. Secure local demand of Natural Gas & Petroleum Products. Expanding Gas connection to Households. Petrochemical Development. Structural Reform. EGYPT as an ENERGY HUB. 2

3 Oil & Gas Sector (2011 till 2017) Instability Reset Re-Energizing Lack of political stability and security No new petroleum agreements. Natural declineof production. Accumulation of international partners arrears until reached 6.3 billion $. Decreased investments in exploration. Gap between gas supply and demand. Continual power supply Outage. Restore political and security stability. Implementing some reform policies. Announcing number of bid rounds and signing a number of agreements. Reducing partners arrears by half. Started the first step of energy subsidies reform in importing liquefied gas to bridge the gap between supply and demand. Acceleration of gas development projects. Discovery of Zohr and started development in a record time. First steps of liberalization of the gas market. Over the past phase, we have succeeded in overcoming a number of challenges, but we were compiled to develop an integrated vision to achieve sustainability and the aspirations of our country towards a better future, therefore we launched The Oil and Gas Sector Modernization Project 3 3

4 EGYPT S OIL AND GAS SECTOR MODERNIZATION STRATEGY AND ROADMAP 4

5 THE OIL & GAS SECTOR MODERNIZATION Objective Of Modernization Project Design and implement an integrated transformative program for Egypt s Oil & Gas sector to enhance its contribution as an engine of economic growth & to reinforce its role as a model for other sectors Modernization consists of 2 phases: Phase 1: Diagnostic and goal setting Phase 2: Detailed plans & Implementation 5

6 DIAGNOSTIC PHASE Analysis and diagnosis of the oil & gas sector The Top 50 Leaders In The Oil & Gas Sector Were Invited Clear Vision For The Sector Was Developed Collectively follow-up workshop arranged with mid-level management to cascade the message Data collection and interviews with different stakeholders to identify the main challenges & leverage points Leaders from across the sector gathered for a day-long workshop to chart the path forward for the sector 61 improvements synthesized into 11 actionable initiatives and consolidated into 6 programs to modernize the sector Progress of the modernization program shared with future leaders from across the sector for awareness and buy-in 6

7 Vision A vision shared collectively was a direct result of the efforts of sector leadership during the visioning workshop By 2021, continuously unlock the sector s full value chain potential as a growth and a sustainable development engine for Egypt o Achieve financial sustainability. o Become a leading regional Oil and Gas hub. o Role model for the future of modernized Egypt. 7

8 THE OIL AND GAS SECTOR MODERNIZATION 1 Investment Attraction Downstream Performance Sector Structure Reform People Upstream Performance Hub Strategy Decision Support and data flow REALIZATION OFFICE

9 Modernization Project and the Sector Sustainable Strategy 9

10 Modernization Project and the Sector Sustainable Strategy The modernization project has become an essential part of Oil & Gas strategy and its work plans, aligned with the framework of integrated vision of energy until 2035, according to the following policy Measures: 10

11 Oil & Gas Sector Strategic policy Measures 1 Boost Oil & Gas Supply 6 EGYPT as an ENERGY HUB 2 Secure Local Demand of Natural Gas & Petroleum Products Petroleum Sector 5 Structural Reform 3 Expansion of Gas Connection to Households 4 Petrochemical Industry 11

12 Oil & Gas Sector Strategic policy Measures 1 Boost Oil & Gas Supply 6 EGYPT as an ENERGY HUB 2 Secure Local Demand of Natural Gas & Petroleum Products Petroleum Sector 5 Structural Reform 3 Expansion of Gas Connection to Households 4 Petrochemical Industry 12

13 1 st Policy Measure: Boost Oil and Gas Supply Intensive Exploration Activities to Boost Oil & Gas Production 1 2 Acceleration of Gas Development Projects 13

14 1 st Policy Measure: Boost Oil and Gas Supply CONCESSION AGREEMENTS 76 New Upstream Exploration agreements signed, $15.3 billion minimum commitment. New blocks are always offered by EGPC, EGAS & GANOPE. 14

15 1 st Policy Measure: Boost Oil and Gas Supply 2- Acceleration of Gas Development Projects During last Three Years 21 gas projects With Investments $ 7.4 Billion With production rates 3.1BCF/day gas 21.1 thousand bbl/day condensate On going 9 Gas development Projects With Investment around $ 30.2 billion With production rates 4,7 BCF/day gas thousand bbl/day Condensates By end of 2019 Planned 11 Gas development Projects With Investment around $ 17.5 billion With production rates 1.9 BCF/day gas. 50 thousand bbl/day condensates 15

16 1 st Policy Measure: Boost Oil and Gas Supply 2- Acceleration of Gas Development Projects 3 Major gas development projects Total Investments : $27.3 bn. Peak Production rates from 3 Projects 5.1 bcfd. Increasing the NG Production by 50% in 2018 Comparing to 2016 Achieve Zero Gas Imports by Increasing NG production by 100% by 2020.

17 1 st Policy Measure: Boost Oil and Gas Supply Sector Sustainability Through the Modernization Project In Consistency with the Modernization Project and previous achievements (Zohr Project), the work will be completed on the 1st Pillar of the sector strategy through: Program One Investment Attraction Program Five Upstream Performance Increase production rate from existing fields through: -Existing wells -New activities -wells & facilities Improve efficiency and adopt new technologies 17

18 Oil & Gas Sector Strategic policy Measures Boost Oil & Gas Supply EGYPT as an ENERGY HUB Secure Local Demand of Natural Gas & Petroleum Products Petroleum Sector Structural Reform Expansion of Gas Connection to Households Petrochemical Industry 18

19 2 nd Policy Measure: Secure Local Demand of Natural Gas & Petroleum Products Manage Demand and Gas Imports to satisfy local Needs. Upgrading Refining Industry إلس باش ب ةا اات ال بلاا. Development of Transportation, Distribution and Storage Infrastructure. Diversification of oil and gas Sources of Supply. 19

20 2 nd Policy Measure: Secure Local Demand 1- Manage Demand and Gas Imports to satisfy local Needs. Monthly Consumption from the Petroleum Products & NG Import % 70% Local Production 4.7 Monthly Average Consumption )6.8 Million Tons( 20

21 UPGRADING REFINERY INDUSTRY Increasing refining capacity and maximizing economic returns to meet local market needs Expansions increasing refining capacity to 41 million tons, 10% increase. 9 Projects (ongoing, Planned) with investments $ 8.1 billion for the next 4 years. Adding new units, to convert fuel oil to higher-value middle distillates. Optimization of the excess refining capacities. Existing and new projects will satisfy 90% of the current local demand. 21

22 2 nd Policy Measure: Secure Local Demand 3- Development of Transportation, Distribution and Storage Infrastructure. Implementing and developing pipelines for transporting crude oil, petroleum products and gas, increasing storage capacities and developing ports to cope with growth in domestic demand with investments of LE 19.4 billion, as follows: Pipelines implemented during the previous two years : Investments cost Length of lines 990 million EGP 346 Km Crude oil and petroleum products 2 billion EGP 300 Km Natural gas Pipelines in progress(being implemented) : Investments cost Length of lines 1.9 billion EGP 527 Km Crude oil and petroleum products 3.7 billion EGP 310 Km Natural gas Storage tanks for crude and petroleum products and development of ports under implementation: Investments cost: 10.8 billionegp *(according to the current exchange rates) 22

23 2 nd Policy Measure: Secure Local Demand of Natural Gas & Petroleum Products 4- Diversification of oil and gas Sources of Supply.. Shares in Production Projects outside Egypt. 1- Sector 9 in Iraq: EGPC participates in 10% in Sector 9 north of Basra in Iraq and the current production average is about 18 thousand barrels / day. 2 - Siba field in Iraq: EGPC is participating in 15% of the Siba field south-east of Basra in Iraq and production is expected to start mid

24 Oil & Gas Sector Strategic policy Measures 1 Boost Oil & Gas Supply 6 EGYPT as an ENERGY HUB 2 Secure Local Demand of Natural Gas & Petroleum Products Petroleum Sector 5 Structural Reform 3 Expansion of Gas Connection to Households 4 Petrochemical Industry 24

25 3 rd Policy Measure: Expansion of Gas connection to Households Thousand Residential unit years 1 million units 50 Total number of households until end of March 2017 was approximately 8 million 10 years 2.8 Million units years 1.7 million units / / / / / / /2017 Average Rate Annual Rate 3 years 2.1 million units Planned 1. Total number of connected households till now are around 7.9 million. 2. Connecting households for the first time in Marsa Matrouh governorate. 30

26 Oil & Gas Sector Strategic policy Measures 1 Enhance Oil & Gas Production& Reserves 6 EGYPT as an ENERGY HUB 2 Secure Egypt s needs from Natural Gas & Petroleum Products Petroleum Sector 5 Structural Reform 3 Boost Natural Gas Residential & Industrial Supply 4 Petrochemical Complex 26

27 4 th Policy Measure: Petrochemical Industry MAJOR PETROCHEMICAL COMPLEXES MOPCO EXPANSION ETHYDCO Total Investment : $ 1.96 billion. Total Annual Production: 2 million tons. Total Investment : $1.9 billion. Total Annual Production: tons. 27

28 Sector Sustainability Through the Modernization Project Sector Strategy Modernization Project 2 nd Policy Measure: Secure Local Demand of Gas & Petroleum Products Natural 3rd Policy Measure : Expansion of Gas Connection to Households 4th Policy Measure : Petrochemical Development Program 4: Downstream Performance & Energy Efficiency Enhance performance through securing efficient mass balancing to maximize Performance & revenues Improve Energy Efficiency for the whole value chain. 28

29 Oil & Gas Sector Strategic policy Measures 1 Boost Oil & Gas Supply 6 EGYPT as an ENERGY HUB 2 Secure Local Demand of Natural Gas & Petroleum Products Petroleum Sector 5 Structural Reform 3 Expansion of Gas Connection to Households 4 Petrochemical Industry 29

30 5 th Policy Measure: Structural Reform SECTOR GOVERNANCE The Egyptian Government has approved a new Gas Law. The new Gas Law, paves the way for a substantial reform of the gas sector. The law mandates the creation of a new independent gas regulator. Offering an opportunity to the private sector to enter and compete in wholesale downstream market segments, the existing shadow regulator finalized the gas transmission codes, gas transmission tariff, which will be published soon. 30

31 5 th Policy Measure: Structural Reform Sector Sustainability Through the Modernization Project Sustainability through the modernization project Second program Restructuring to create a well-governed sector to help increase national wealth and achieve sustainable development. Demarcating Sector roles between policy-making, operations and regulations. Enhance sector work flow to create an attractive investment environment. Third program People agenda Maximizing the benefit of the human element in the sector, which acts as a fundamental pillar of development. Working on development and raising the efficiency of employees and optimizing the available competencies. Developing modern human resource management systems and efficiencybased promotions. 31

32 Oil & Gas Sector Strategic policy Measures 1 Boost Oil & Gas Supply 6 EGYPT as an ENERGY HUB 2 Secure Local Demand of Natural Gas & Petroleum Products Petroleum Sector 5 Structural Reform 3 Expansion of Gas Connection to Households 4 Petrochemical Industry 32

33 6 th Policy Measure: EGYPT AS AN ENERGY HUB Suez Canal & SUMED Oil & Gas infrastructure (LNG Facilities, Pipelines) In the middle of resource-rich countries & major energy consumers International Maritime Trade Suez and Alexandria World class refining centers and linking the Delta Region to Upper Egypt Egypt an Energy Hub International Trade Line SUMED Pipeline Arab Gas Pipeline LNG Facilities Formation of a Governmental Committee from different entitles/ ministries in November

34 THANK YOU