Event with the Minister of Petroleum and Mineral Resources

The Canada Egypt Business Council (CEBC) hosted a special event and panel discussion featuring H.E. Eng. Sherif Ismail, Minister of Petroleum and Mineral Resources on December 10, at the Semiramis Intercontinental Hotel. Joining minister Ismail on the panel were Dr. Kamilia Sofia, CEO & Managing Director, The Egyptian Methanex Methanol Company, Dr. Muhammad Zaher, President, Z-Gold Resources and Chair of the Mining Committee, CEBC and Mr. Saiid El Derini, General Manager and Partner, Tam Oilfield Services and Chair of the Petroleum Committee, CEBC.

Over 400 distinguished attendees were present at the event, from former ministers, ambassadors, to CEBC members and guests, among whom were minister Ahmed Imam, minister of electricity and energy, minister Taher Abou Zeid, minister of state for sports affairs and former ministers Dr. Essam Sharaf, Dr. Ali Moselhy, Eng. Abdullah Ghorab, Eng. Alaa Fahmy, Dr. Hany Helal and Counselor Adly Hussein. Also present was H.E. David Drake, ambassador of Canada to Egypt, in addition to their Excellencies the ambassadors of Georgia, Malta and Japan.

The discussion revolved around the crises and challenges that are facing the oil and gas sector as they escalated eerily during the last period affecting the political and economic stability and increasing the challenges facing Egypt in this critical timing. Also the discussions drew the light on the fact that Egypt is still very rich in its natural resources and this can help fill in the gap between the supply and demand as well as push forward towards a promising future in terms of the sector’s economic and development plans.

CEBC Chairman, Mr. Motaz Raslan, delivered the opening remarks. In his introduction, he highlighted the importance of this sector in this current period.
Ambassador of Canada, H.E. Ambassador David Drake gave his opening remarks from the panel.

Dr. Kamilia Sofia then gave a presentation on the industry of methanol and the different fields of industries it takes part in, she also gave a brief on Emethanex activities and shared the company’s success story in Egypt. EMethanex is the Egyptian joint venture operation of Methanex Corporation, the global leader in methanol industry supply, distribution and marketing. Methanex holds a 60% interest in the EMethanex joint venture, together with Egyptian government partners: Egyptian Petrochemical Holding Company (ECHEM), which holds 12%; Egyptian Natural Gas Holding Company (EGAS), which holds 12%; Egyptian National Gas Company (GASCO), which holds 9%; and the Arab Petroleum Investments Corporation (APICORP), which holds 7%. EMethanex is currently developing a 1.3 million tone/year methanol facility at Damietta, Egypt on the Mediterranean Sea. Commercial operations were set to start in the second half of 2010. This production site was planned to supply primarily European & Egyptian methanol markets, and will integrate seamlessly into Methanex’s global methanol supply chain.

Dr. Muhammad Zaher, then took the podium and gave an informative presentation, he concluded his remarks by saying that Egypt represents the future in the regional natural resources sector. “Our Country can provide an ideal environment for the technical and capital firms to incubate, finance, manage and build public and private companies. This is of course is supported by the unique geological setting of the country as well as the restructured mining laws to attract local and foreign investment to our mining industry,” said Zaher.

Zaher mentioned also the fact that due to political reasons, the mining industry in Egypt was neglected for decades leaving a huge opportunity to restart modern exploration in a much known rich and non-consumed shield. He sees that geographically, a national development progress can be achieved all over the country due to the wide spread of high potential deposits of mineral commodities.
He also said that governmental decisions aiming a change are vital for the mining industry survival and that the industry needs immediate “Temporary Relief Measures” as well as “Confidence Building Measures” like those applied to the oil and gas sector lately.

Minister Sherif took the podium and gave an overview on the challenges facing the sector of oil and mining, mentioning as well the potentials of the petroleum sector in Egypt. He also made a sort of an evaluation to the last period showing what has been achieved and what is to be achieved on the short term plan.

He also provided the audience with important figures; the average increase in the consumption of the petroleum 605 million tons representing %5.3 annually as well as 348 million tons average increase in the consumption of natural gas representing %5.8 annually.

“The challenges we face are mainly in the increase of the production, imports and subsidies.” Ismail highlighted. He also talked about the fact of depending on subsidies which reduces spending on other state important national services such as health and education.  He also talked about the subsidies and its impact on the growth rates of the national economy, highlighting the list of prices of petroleum products in the local market.

Minister Ismail also commented on the reasons behind the value increase of subsidies of the petroleum products which he summarized in the following points:

• The stability of the selling prices of most petroleum products for a long time
• The increase in international prices of crude and petroleum products
• Increase of the exchange rate
• Increasing the volume of consumption of petroleum products and natural gas
• Stagnancy of the rates of domestic production
• Energy Efficiency

The minister then started discussing the potentials of Egypt and its resources “We have to overcome the challenges faced as well as continuing to develop the petroleum industry for its contribution to the growth of the national economy and those potentials lie in the strategic situation on the map, impressive local market outbidding global research and exploration (applicable conventions, 164 agreements), accumulated experience in the oil industry and petrochemical industries to maximize the value additives”, noted Ismail.

Minister Ismail then briefed the audience with the ministry’s short term plan, listing the priorities of the continuity to provide the needs of the domestic market of petroleum and natural gas products and their stability in order to achieve the desired growth rates. Also to start dealing with the issue of subsidies to ensure its delivery for those who deserve it most and provide the needs of future development plans as well as the need to increasing the production of crude oil and natural gas to the maximum limits technically feasible, needless to mention the importance of restoring the climate for investment in the petroleum industry.

After the minister’s presentation the floor was then opened to questions raised by the audience covering a lot of important issues such as pricing, mining challenges the subsidies issues and more.