Egypt has been very successful in attracting foreign investment and arranging fruitful partnerships with major international oil and gas companies. The success of these partnerships has been due to the continuous support of the Egyptian Government and has been enhanced by many reasons that make Egypt’s energy industry a desirable location for investment. These reasons include:

• A booming petroleum sector
  
  
• Strategic location
  
  
• Expertise of the state energy company, EGPC
  
  
• Facilitated legislation
  
  
• Economic stability
  
  
• Political stability

A booming petroleum sector

The adoption of state-of-the-art technologies encouraged Egypt to explore all possible chances to sustain its credibility within all sectors of the hydrocarbon industry. Egyptian oil and gas experts enhanced the exploration of new deep water exploration and development adding up new reserves to the Egyptian oil and gas reserve, and resulting in a unique hydrocarbon reserves.  In the western desert, new techniques and geological concepts have been introduced in the field giving rise to new opportunities for oil and gas reserves in Egypt. There has been an effective introduction of new technologies and theories in the natural gas sector and in addition to the presence of exploration acreage, instead of having one bid a year, the 3 organizations responsible for the oil and gas exploration (EGPC, EGAS and GANOPE) have 2-3 bid rounds every year, increasing the investment opportunities.

Strategic location

Due to Egypt’s geographical location, Egypt is located at cross roads with three continents (Africa, Asia and Europe) and thus transportation is facilitated between these continents. With proximity to important markets and having close ties with Europe, Egypt is a gateway of all East-West trade, making it a place for investment in both the upstream and downstream sectors. In addition to being on one of the vital marine traffic routes, Egypt controls the Sinai Peninsula, which is an area of great hope with regard to the petroleum industry.

Expertise of the state energy company, EGPC

Formed in 1962, the Egyptian General Petroleum Corporation (EGPC) became the major operator in the form of joint ventures with foreign companies. As the first economic corporation established in the petroleum industry in Egypt, EGPC has expertise with all sectors of the industry as it is active in the upstream, downstream and petrochemical sectors. It has full responsibility for all sectors of the Egyptian petroleum industry and holds the sole right to import and export crude oil and other petroleum products. As a controller of the industry, any foreign investments in Egypt are maintained through a joint venture with the EGPC and are supervised by the government.

Facilitated legislation

There have been new petroleum-related legislation introduced which makes Egypt an attractive investment destination. Since the 1990s, the Egyptian government started passing new laws with the aim of attracting local, regional and multi-national investments through reducing & simplifying the procedures & regulations that hinder investment. For more information on the Egyptian legal framework created by the government that facilitates and ensures for the investor the sustainability of their installations, visit our regulations section.

Economic stability

With the installation of the 2004 Egyptian parliament, the Government of Egypt began a new reform movement, following a stalled economic reform program begun in 1991, but moribund since the mid-1990s. In the past year, the cabinet economic team has simplified and reduced tariffs and taxes, improved the transparency of the national budget, revived stalled privatizations of public enterprises and implemented economic legislation designed to foster private sector-driven economic growth and improve Egypt's competitiveness.

Political stability

Today, Egypt lives a new phase of political and democratic development aiming at more deepening of democratic practice, enhancing freedoms and laying down the state of law, institutions and respect of human rights. To bolster stability and moderation in the region, Egypt has provided military assistance and training to a number of African and Arab states. Egypt remains a strong military and strategic partner of the United States.  Egypt is enjoying political stability amidst a high tensioned region.

For more information on why Egypt is a desirable location with regard to the energy industry, contact us to order the Petroleum in Egypt: Investor’s Handbook.