February 2007
Issue 2
Of oil and turmoil page 14
Egypt and its looming energy crisis
page 15
Egypt’s Oil and Gas: Some Crucial Issues page 18
Published by Egypt Oil and Gas S.A.E Corporate Responsibility: A Step towards Socioeconomic Sustainability This feature reveals an oil and gas industry that provides for health, safety and education
The lucrative acquisition of a first-rate asset Centurion: A success story Dr. Hany Elsharkawi talked about the company’s ambitions and strategies
page 8
WITH the participation of Egyptian petroleum companies, the first factory of Ruhrpumpen – Egypt will be established in the governorate of Suez with a total investment of 20 million Euros. According to the terms of agreement, Egyptian General Petroleum Corporation, Enppi, Petrojet and El-Nasr Company will have a share of 33%, while the German Ruhrpumpen will acquire the remaining shares. The factory, being the first of its kind in the Middle East, will produce various types of pumps needed in the oil and gas industry. It will also manufacture and maintain all kinds of pumps used in Egypt which count for more than 6,000 pumps, as well as “availing the required spare parts,” reported Oil Egypt. The factory’s production capacity is estimated to reach 400 pumps annually after the completion of its three phases. The first phase is to be completed by next May, which will produce its first pump for GASCO by the end of August. Meanwhile, Enppi and Petrojet are responsible for the design and construction of the factory.
24 pages Halliburton: The legacy of Erle Starting with one man’s idea, Halliburton is now one of the most important service companies in the field
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Scarcity of resources is not the only factor threatening the energy industry, the lack of security is yet another threatening factor By Yomna Bassiouni
Canadian Nexen coastal oil pumping facility at Ash Shahir and the Safer oil pumping facility in Marib governorate. Four would-be bombers and a guard were killed when security forces blew up four trucks rigged with explosives, before they reached the intended targets. Although no group claimed its responsibility for this attack, yet the incident draws the same trademarks of Al-Qa’eda’s previous attacks on oil facilities in the Arabian Peninsula. However, the use of car bombings represent a “new tactic in terrorist operations in Yemen,” reported the Global Security News and Reports department at the Overseas Security Advisory Council. In Sudan, the increasing tensions in Darfur had their impact in disturbing the oil sector as well. National Redemption Front (NRF) fighters seized the Abu Jabra oilfield, located in Southern Kordofan, making a “rare eastward extension of their campaign” toward central Sudan. Such disturbances have led to the decline of Sudan’s rate of oil production.
IN tackling the issue of security, there are three types of security vulnerability in the region; violent attacks and explosions, absence of safety regulations, as well as corruption. Unfortunately, the MENA region is known to be an unstable region, where violence, rebels and terrorism negatively affect economic development and hence, the different sectors including oil and gas. For instance, Saudi Arabia, owning the largest reserves, has been repeatedly threatened by possible brutal attacks led by Al-Qa’eda targeting its oil and gas infrastructures. The Saudi security forces thwarted a suicide car bomb attack on a major oil production facility in the eastern town of Abqaiq, near Dammam. The targeted oil facility handles about twothirds of the country’s oil production. This attack is considered the first direct assault on Saudi oil production, said BBC security correspondent Frank Gardner. Last September, Yemeni authorities prevented two suicide attacks on two of its oil and gas installations; the
EGYPTIAN Minister of Petroleum Eng. Sameh Fahmy announced the discovery of seven oil and gas sites expected to secure an additional 140 million barrels of crude oil and condensates besides 1.5 trillion cubic feet of natural gas, according to a statement by the ministry. The new discoveries that were achieved over the first six months of the fiscal year 2006-2007 were found in the Gulf of Suez, the Eastern and Western deserts and the Mediterranean areas. The Western Desert has witnessed the most important discoveries, particularly Karam 1 and Karam 2 discovered by the Greek oil Company, Vegas, in addition to two other discoveries by Shell (west Stra 1 and west Stra 3). Also, Khalda Petroleum Company attained two other discoveries in Qasr 34, expected to add 150 billion cubic feet of gas, and Sierra 5. Khalda also discovered Gad 1 in Matrouh area. According to the report received by the Minister of Petroleum, “Egypt has signed a number of agreements with international petroleum companies with advanced technologies and expertise, which reflects the feasibility of investment in the oil sector.”
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Egypt is characterized by its high potential for developing and ameliorating its energy sector through the diverse oil and gas projects implemented across the country. During 2006 and throughout 2007, the Ministry of Petroleum will apply strategies to increase its production rate, maximize its discovery and exploration progressions and attract more foreign investments OVER the past five years, the Egyptian petroleum sector witnessed the signing of 99 agreements with international firms. Foreign investments are increasing in the Egyptian market, which opens the door for the issuance of more joint ventures in the local oil and gas sector. In the last quarter of 2006, Egyptian-Bahraini cooperation was initiated for the first time in the gas sector, through which a gas processing plant will be established to extract derivatives from the Gulf of Suez in order to produce and export bromine and butagas. According to the terms of agreement, the Egyptian Natural Gas Holding Company and the Bahraini Dana Company hold an interest rate of 40% each, while the Arab Petroleum Investments Corp. (APICORP) has the remaining 20%. In the framework of the Egyptian-Chinese agreement to construct oil rigs in Egypt, Minister of Petroleum, Sameh w
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Fahmy and China’s Ambassador to Egypt Wu Sike activated this agreement as a group of three Egyptian companies and China’s HH Corporation are to begin the construction of three rigs in 2007 for local and international use. Asked about the services and profit provided by the MoP to Egyptian citizens, Fahmy referred to the latest social studies to prove that in Egypt, citizens buy fuel and gas for their daily use, whether to run their vehicles or for their appliances at home, at very reasonable prices. Moreover, the MoP directs part of its revenues towards its employees working in the petroleum sector; around 180,000 personnel are hired in the different domains of the oil and gas sector and this number is expected to increase to 200,000 in 2007. Continued on page 13
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