(MENAFN- Daily News Egypt) Egyptian Minister of petroleum and Mineral Resources, Karim Badawi, provided an update on the country's energy sector during a Tuesday address to members of the American Chamber of Commerce in Cairo.
Badawi highlighted significant progress in narrowing the gap between the selling price and production costs of petroleum products. He noted that the gap for automotive fuels had decreased from 21-25% to 11-15%, while the diesel gap had narrowed from 42% to 31%. The Minister emphasized the government's ongoing efforts to further reduce these gaps to support production and economic development.
The Minister also revealed a 14% annual average increase in natural gas consumption, attributing this growth to incentives, discoveries, investments, and accelerated development of existing resources. Despite this, Badawi acknowledged a 10% decline in oil production and a 25% decrease in gas production last year.
To address these challenges, the Ministry has focused on increasing reserves, with 71 million barrels added from January to October. Additionally, 40 oil discoveries and 14 gas discoveries were made during the same period.
Badawi emphasized the ministry's commitment to supporting the success of foreign companies operating in Egypt. He outlined several initiatives aimed at ensuring stable cash flows for investors while simultaneously increasing production, reducing imports, and stimulating economic growth. The Minister also highlighted the importance of collaboration with the Ministry of Electricity to improve energy efficiency and optimize the energy mix. He stressed the government's commitment to a collective approach, involving all relevant ministries.
Expressing optimism about the future, Badawi noted that Egypt possesses not only a strategic geographic location but also a robust infrastructure, supportive assets, a large market, and strong regional relationships. These factors, he argued, position Egypt to become a leading player in the natural gas sector.
The Minister praised the achievements of his predecessor, Tarek El Molla, in the petrochemicals industry and reaffirmed the government's commitment to supporting this sector. Badawi also emphasized the potential of the mining sector, stating that the government aims to increase its contribution to GDP from the current 1% to 5-6% in the coming years.
Badawi further highlighted the government's strategy to increase the contribution of new and renewable energy to the energy mix to 42% by 2030. He acknowledged that high economic growth rates necessitate increased energy consumption and that the petroleum sector must adapt to meet these demands.
The Minister discussed the government's incentive program to encourage investment in natural gas, which he believes will boost production and reduce imports. He noted that the mining sector has adopted a new investment model, moving away from the production-sharing agreements used in the oil sector. Badawi highlighted the government's efforts to facilitate investment in the mining sector through an online platform and cited the Sukari gold mine as an example of successful foreign investment.
The Minister concluded by emphasizing the importance of expanding the domestic natural gas network, promoting the conversion of vehicles to natural gas, and simplifying the procedures for these initiatives.
Tarek Tawfik, President of the American Chamber of Commerce in Cairo, acknowledged the challenges facing the Egyptian economy and the oil and gas sector, including financial, technical, and geopolitical factors. He expressed optimism about the future, noting the potential for significant opportunities.
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