Egypt - Natural Resources
In addition to the agricultural capacity of the Nile Valley and Delta, Egypt's natural resources include petroleum, natural gas, phosphates, and iron ore. Crude oil is found primarily in the Gulf of Suez and in the Western Desert. Natural gas is found mainly in the Nile Delta, off the Mediterranean seashore, and in the Western Desert. Oil and gas accounts for approximately 12% of GDP. Export of petroleum and related products (including bunker and aviation sales) amounted to $2.7 billion in fiscal year 2003-04.
Crude oil production has been in decline for several years, from a high of more than 920,000 barrels per day (BPD) in 1995 to less than 662,000 BPD as of April 2006. To minimize the growing domestic demand of petroleum products, currently estimated at 25 million metric tons per year, Egypt is encouraging the production of natural gas. Over a 5-year period, production of natural gas increased by approximately 75% to reach about 3.3 billion cubic feet per day (BCFD) by the end of FY 2003/04. Currently, gas accounts for almost 50% of all hydrocarbon usage in Egypt.
Over the last 22 years, more than 230 oil and gas exploration agreements have been signed and multinational oil companies spent more than $27 billion in exploration companions. As of 2005, crude oil reserves were estimated at 3.7 billion barrels, and proven natural gas reserves were estimated at 58.5 trillion cubic feet (TCF) with probable additional reserves totaling another 40-60 TCF. Texas-based Apache Oil Company is the largest American investor in Egypt, with a total investment of more than $2.8 billion since 1996.
Egypt's excess of natural gas will more than meet its domestic demand for many years to come. The Ministry of Petroleum has determined that expanding the Egyptian petrochemical industry and increasing exports of natural gas as its most significant strategic objectives. As of September 2005, three liquefied natural gas (LNG) trains had been in operation. The first is in Damietta on the eastern side of the Delta and started exporting in early 2005. It is headed by the Spanish electric utility, Union Fenosa. The second LNG project is located at Idku on the western side of the Delta and started exporting in 2005. The first train started in April 2005, and the second in September. British Gas (BG) Group and the Malaysian state oil company Petronas are the major investors. Another project that will utilize gas for export and domestic consumption is the Mediterranean Gas Complex in Port Said where the Italian company AGIP and BP are the main shareholders. This facility will have a total cost of about $315 million and went on line in late 2004.
Egypt and Jordan established the Eastern Gas Company to export natural gas to Jordan, and then later to Syria and Lebanon. In summer 2003 Egypt began exporting gas to Jordan via a new pipeline from El Arish on Egypt's north Sinai cost to Taba on the Gulf of Aqaba, and then underwater to the Jordanian city of Aqaba. Gas exports to Jordan generated gross revenues of approximately $60 million in 2003/04 and are currently reaching $85-100 million.
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