BMI's Executive Summary

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The Sector At A Glance

Key Insights On The Oil & Gas Sector Of Egypt

The latest Egypt Oil & Gas Report from BMI forecasts that the country will account for 5.73% of MEA regional oil demand by 2010, while providing just 1.57% of supply. MEA regional oil demand rose to 10.7mn b/d last year and should average 10.9mn b/d in 2006, before reaching 12.2mn b/d by 2010. MEA gas consumption in 2005 was 343bcm, with demand of 533bcm targeted for 2010. Production last year of 448bcm should reach 774bcm by the end of the decade. Egypt's share of consumption in 2005 was 7.58%, while its share of production was 7.81%. By 2010, its share of demand is forecast to be 7.50%, with the country accounting for 9.04% of supply.

Assuming an uneventful Q4, we are now predicting an OPEC basket price for 2006 averaging US$61.10/bbl – an increase of US$1.10 from our June forecast. This also represents a 19% rise from the FY05 average. Our forecasts for the US, Brent and Urals are US$66.40, US$65.40 and US$61.60/bbl respectively. For 2007, we continue to assume an OPEC basket price of US$50/bbl, which implies US$55.40 for the US, US$53.40 for Brent and US$49.50 for Urals. Prices are then forecast to fall by around US$5/bbl in 2008-2010, with the OPEC price averaging US$45/bbl over the period.

Egyptian real GDP growth is now forecast by BMI at 6.8% for 2006, following 4.5% in 2005. We are assuming 5.8% growth in 2007 and an average 4.7% in 2008-10. We expect oil demand to rise from 616,000b/d last year to 697,000b/d in 2010, subject to national efforts to conserve oil and increase the use of gas. State oil company Egyptian General Petroleum Corporation (EGPC) operates in partnership various international oil companies (IOCs), and alone accounts for just 20% of the country's oil output. In spite of higher recent IOC investment, combined oil and gas liquids output is forecast to decrease from 696,000b/d in 2005 to 610,000b/d in 2010. Gas production should reach 70bcm by 2010, up from 34.7bcm last year. Consumption is expected to rise from 25.5bcm to 40bcm by the end of the forecast period, providing exports of 30bcm.

In the BMI Business Environment Ranking matrix, Egypt this quarter receives a slightly lower composite score of 31, which now ranks the country equal eighth out of 16 states included in the MEA region, alongside Oman, Algeria and Bahrain. Egypt's overall business environment can be considered pretty neutral in a regional context, thanks largely to a high level of perceived economic risk, falling oil output and a below-average reserves-to-production ratio (RPR). IOC involvement has, however, been rising as a result of Egypt's new-found gas export potential.

Contents

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Chapter 1 - Executive Summary

Chapter 2 - SWOT Analysis

Egypt Political SWOT

Egypt Economic SWOT

Chapter 3 - Regional Market Overview

Middle East/Africa Region

Table: MEA Oil Consumption (000b/d)

Table: Middle East/Africa Oil Production (000b/d)

Table: Middle East/Africa Oil Refining Capacity (000b/d)

Table: Middle East/Africa Gas Consumption (bcm)

Table: Middle East/Africa Gas Production (bcm)

Table: Middle East/Africa LNG Exports/(Imports) (bcm)

Egypt

Chapter 4 - Business Environment Rankings

Egypt

Middle East/Africa Region

Chapter 5 - Egypt Business Environment Ranking

Economics – long-term risk

Politics – long-term risk

Oil & Gas Growth

Oil/Gas Reserves

Licensing/Regulation

Competitive Environment

Chapter 6 - Business Environment Overview

Political Risk Summary

Economic Risk Summary

Business Environment Risk Summary

Legal Code/Corruption

Foreign Direct Investment

Tax Regime

Chapter 7 - Oil Market Outlook

Table: Crude Price Forecasts 2006

Revised Forecasts

Table: Oil Price Forecasts

Chapter 8 - Regional Supply and Demand

Middle East/Africa

Table: Middle East/Africa Oil Production (000b/d)

Table: Oil Consumption (000b/d) – Middle East/Africa

Chapter 9 - Global Picture

Table: Global Oil Consumption (000b/d)

Table: Global Oil Production (000b/d)

Chapter 10 - Industry Forecast Scenario

Oil and Gas Reserves

Oil Supply and Demand

Gas Supply and Demand

LNG

Refining and Oil Products Trade

Revenues/Import Costs

Table: Egypt Oil & Gas – Historic Data & Forecasts

Other Energy

Table: Egypt Other Energy – Historic Data & Forecasts

Key Risks to BMI’s Forecast Scenario

Chapter 11 - Economic Outlook

Table: Economic Indicators

Chapter 12 - Country Snapshot: Egypt Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption and Stratification

Table: Wages per year

Chapter 13 - Regional Case Study

Global Player With Conflicting Domestic Needs

Chapter 14 - Competitive Landscape

Executive Summary

Table: Key Players – Egyptian Energy Sector

Overview/State Role

Table: Key Upstream Players

BG – Summary

Eni – Summary

BP – Summary

Shell – Summary

Apache – Summary

Table: Key Downstream Players

Lukoil – Summary

ExxonMobil - Summary

Chevron – Summary

Premier Oil – Summary

Petrobras – Summary

Chapter 15 - Company Monitor

Egyptian General Petroleum Corporation (EGPC)

BP Egypt

Eni Egypt

Shell Egypt

BG Egypt

Apache Energy

Chapter 16 - BMI Forecast Modelling

How we generate our industry forecasts

Energy Industry

Cross checks

Sources

Chapter 17 - Appendix: Regional Demographic Data

The Long View: Data Over The Economic Cycle (2000-2007)

Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Network of Middle Eastern and African Oil and Gas Sources

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BMI's Middle Eastern and African Oil and Gas Reports are based on an extensive network of multilateral organisations, government departments, oil and gas industry associations, chambers of commerce and company reports. Information sources include: