Egypt Oil and Gas Market Size & Share Analysis - Growth Trends & Forecasts (2023 - 2028)

Egypt Oil and Gas Market Size & Share Analysis - Growth Trends & Forecasts (2023 - 2028)

The Egyptian oil and gas market is expected to witness a CAGR of more than 8% during the forecast period.

Key Highlights

• Over the medium term, the Egyptian oil and gas market witnessed robust growth primarily due to the country's favorable government policies and high production rate, and international companies are also planning to invest in the country, which is expected to drive the market.
• On the other hand, global inclination toward renewable fuels may also adversely affect the oil and gas demand in national and international markets, as the country exports most of its petroleum.
• Nevertheless, the oil and gas industry has made 52 discoveries, including 39 crude oil discoveries and 13 gas discoveries, in the Western Desert, the Gulf of Suez, the Mediterranean, Sinai, and the Eastern Desert. The discoveries made are expected to boost oil and gas production in the country and create ample business opportunities for the companies operating in the country's oil and gas sector.

Egypt Oil And Gas Market Trends

Upstream Sector is Expected to be the Fastest Growing Sector

• The upstream sector is expected to be the fastest-growing oil and gas sector during the forecast period. A spike in natural gas production and several new oil and gas discoveries that happened in recent months may drive the segment's growth.
• Egypt is among one of the largest natural gas producers in Africa. According to the Organization of Petroleum Exporting Countries (OPEC), the country produced 0.461 million barrels of crude oil per day (MBPD) in 2021 and recorded a slight fall from 0.487 MBPD of oil production in 2020.
• However, the natural gas production in the country reached 70.308 billion cubic meters (BCM) of gas in 2021 from around 61.77 BCM of natural gas production in 2020. Further, the country had approximately 3.3 billion barrels of crude oil reserves and 2.209 trillion cubic meters of natural gas as of 2021. Such significant oil & gas reserves are likely to create a potential oil and gas market.
• According to the Minister of Petroleum and Mineral Resources, the Egyptian petroleum sector is implementing an extensive drilling program in cooperation with foreign partners to explore new oil discoveries and increase production.
• In February 2022, United Arab Emirates company Dragon Oil made its first discovery in Egypt in the Gulf of Suez, with reserves estimated at 100 million barrels of crude, noted to be one of the largest discoveries in the region in the last two decades.
• Hence, such developments are likely to increase the upstream segment's growth during the forecast period.

Increasing Investment in the Oil and Gas Sector is Expected to Drive the Market

• Increasing investment in the oil and gas sector from private companies proved to be the most effective driver for the Egyptian petroleum industry's growth, owing to the liberal investment policies of the country and the huge number of oil and gas fields in the country. According to Egypt Oil & Gas, during the year 2020/2021, the aggregate value of investments in natural gas extraction in Egypt was approximately EGP 49 billion.
• As per Petroleum Minister, Egypt targets USD 7 billion in direct foreign investment (FDI) for its oil and gas sector in the fiscal year 2022-2023, starting in July 2022. In January 2022, eight exploration blocks across an area of 12,3000 sq km were awarded to Eni, BP, Apex International, Energean Egypt, United Energy, Sipetrol, and INA. The blocks are located in the Mediterranean Sea, the Gulf of Suez, and the Western Desert. Investment is set at a minimum of USD 250 million, with at least 33 exploration wells to be drilled.
• Further, in early 2022, the Egyptian government awarded eight of the twenty-four blocks. Eni Spa received exploration licenses to five blocks, and the other bid winners were BP plc, Apex International Energy Management LLC, and United Energy Corp. Moreover, Egypt is focusing on increasing its natural gas export, and therefore, it is expected to increase its drilling activities and sign exploration agreements to boost its production capacity.
• In December 2022, the Petroleum and Mineral Resources Ministry in Egypt announced a total investment of USD 2.1 billion in oil & natural gas exploration plans until 2025. The investments are reported for the Mediterranean Sea in partnership with major international companies. Moreover, with the pilot findings, the new explorations are expected to result in promising discoveries supporting the oilfield services market in the coming years.
• Thus, due to such developments, the Egyptian oil and gas market is expected to be overwhelmed by foreign investments in the coming years.

Egypt Oil And Gas Industry Overview

The Egyptian oil and gas market is moderately fragmented. Some of the key players in the market (in no particular order) include BP PLC, Shell PLC, Total Energies SE, Eni SpA, and ExxonMobil Corp., among others.

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