EIA: Egypt Oil Market Analysis

Egypt is the largest non-OPEC oil producer in Africa and the second-largest dry natural gas producer on the continent. The country also serves as a major transit route for oil shipped from the Persian Gulf to Europe and to the United States.
• Egypt is the largest oil and natural gas consumer in Africa, accounting for about 20% of petroleum and other liquids consumption and 40% of dry natural gas consumption in Africa in 2013. Energy subsidies have contributed to rising energy demand and a high budget deficit.
• One of Egypt’s challenges is to satisfy increasing oil demand amid falling production. Total oil consumption grew by an annual average of 3% over the past 10 years. Egypt’s oil consumption currently outpaces its oil production.

• Egypt has the largest oil refining capacity in Africa, although it operates well below capacity. The country’s refining output declined by 28% from 2009 to 2013, despite growing domestic oil consumption. As a result, Egypt must import petroleum products to make up for the shortfall.

• Egypt’s dry natural gas production declined by 5% from 2012 to 2013. Substantial natural gas discoveries in the deepwater Mediterranean Sea and in other areas have been undeveloped because the price that Egypt’s government was willing to pay foreign operators for the natural gas was too low, making some investment projects commercially unviable. However, in recent years Egypt has signed deals to pay foreign operators a higher price for the natural gas they produce.