When Egyptian strongman Hosni Mubarak was taken down in the 2011 revolution, the energy sector went with him. Since then, it has been a long stream of bad news for the sector and its foreign investors, most of whom had to withdraw non-essential personnel in the violent aftermath of the 2 July 2013 coup that overthrew yet another leader, the Muslim Brotherhood’s Mohamed Morsi.
Now, with the energy sector pretty much out of control, domestic demand on the rise with shortfalls threatening further stability, foreign reserves plummeting and $6 billion in arrears owned to foreign investors, the interim military-backed government is trying to put things right—sort of.
Late October and early November have seen some indications of compromise over the energy sector, but not nearly enough. Domestic production was largely halted with the Arab Spring, and while the government is hoping for a revival it is limiting the playing field to the onshore ventures because there’s no incentive for investors to hit the gas-rich ultra-deep.
Onshore, the interim government has signed nine new oil and gas exploration deals representing new investment of $470 million that should see the drilling of 15 new wells in the Gulf of Suez, the chaotic Sinai and the eastern (Nubian) and western deserts.
The contracts, the first such since 2010, went to Shell, BICO, Greystone, Petzed and the Egyptian General Petroleum Corporation (EGPC).
Then, during the first…