Egyptian petroleum minister fleshes out country’s progress as regional hub

The Egyptian government has made a point of investing in the Arab region, especially through projects that promote international cooperation.
Sunday 24/02/2019
Egypt’s Minister of Petroleum and Mineral Resources Tarek el-Molla arrives for a meeting  in Nicosia, last September. (Reuters)
Long-term ambitions. Egypt’s Minister of Petroleum and Mineral Resources Tarek el-Molla arrives for a meeting in Nicosia, last September. (Reuters)

Egyptian Minister of Petroleum Tarek el-Molla said Cairo would soon announce its first international bid for oil and gas exploration in the country’s Red Sea territory, as a step towards Egypt increasing its position among natural gas suppliers in the region.

Molla said the ministry carried out two seismic surveys in the Red Sea and southern Egypt that indicated “positive signs that encouraged us to submit tenders to international companies for the extraction of oil and gas in that virgin region.”

“This procedure would not have been possible without the delimitation of the maritime border with Saudi Arabia in April 2016. [The agreement] enabled Egypt to search and explore in this region for the first time,” Molla said.

The surveys were carried out by US companies TGS and Schlumberger at a cost of about $750 million.

Tenders for oil and gas exploration in the Red Sea were to have been announced last December but Molla said Egyptian officials decided to wait to better market the promising potential in the region.

The Red Sea tender is expected to attract more foreign investments to the region, which has been far from the attention of international oil drilling companies until the border demarcation with Saudi Arabia.

The Egyptian government has made a point of investing in the Arab region, especially through projects that promote international cooperation.

Molla said Petrojet, a subsidiary of the Petroleum Ministry, was executing the second phase of the al-Zubair gas project in Iraq for the Oil Projects Company. He also revealed that a partnership agreement had been signed to strengthen cooperation with the General Company for Heavy Engineering Equipment, one of the companies of the Iraqi Ministry of Oil.

Petrojet also operates in southern Iraq in the manufacture of ready-for-use equipment for distillation towers, air coolers, heat exchangers, pressure vessels, steel installations and pipes. The project employs about 1,500 people.

Molla said constructing a gas treatment plant in Siba field in Iraq had been completed. “We will renew the contract for importing crude oil from Iraq for another year and with the same quantities,” he said.

The Petroleum Ministry on February 12 announced awarding 12 oil and gas exploration and drilling concessions in the Gulf of Suez, Western and Eastern Desert, Mediterranean and Nile Delta regions to nine international companies through two international tenders.

Cairo previously said it would supply Egyptian refineries with about 12 million barrels of Iraqi crude oil in 2018. Moreover, 26 crude oil depots were set up in Kuwait as part of the Lower Fars heavy oil development programme operated by Petrofac for the Kuwait Oil Company. In addition, Petrojet has completed construction of the expansion project of the Timimoun gas processing plant in Algeria.

Molla also pointed out that the ministry was involved in a gas pipeline project in northern Jordan for the Egyptian company Engineering for the Petroleum and Process Industries (ENPPI), the general contractor of the project in cooperation with Fajr Jordan.

Egypt is also participating in investment projects in the United Arab Emirates. Petrojet has completed work on the Yas-Mina Zayed gas pipeline project, laying pipelines over 30km on behalf of the Egyptian Gasco Company. Moreover, Petrojet is executing the integrated development project of Rumaitha-Shanayel station in the UAE on behalf of ADNOC Onshore and the City Gas Network project for ADNOC Distribution Company.

Molla said Petrojet is involved in five projects in Saudi Arabia, including working on treatment of oily drainage water for ENPPI of Egypt, a fuel supply project in Al-Yamamah and a pipeline agreement for the Arab Gas Company.

The other projects include the Haradh pipeline for ENPPI and the civil, mechanical and electrical works for the Hawiyah gas plant for Saipem and Saudi Aramco.

The civil and mechanical works project for the renovation of a fire extinguishing network at Al Khafji plant in Saudi Arabia, which includes 39 warehouses, was assigned to Egyptian ENPPI and Al Khafji Joint Operations Company. ENPPI was awarded the contract for the civil and electromechanical works for two pipelines for the benefit of Nabec and Aramco.

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