Political co-operation, as well as political stability, is needed to capitalise on the success of Zohr and transform the eastern Mediterranean into a gas energy hub, according to Tarek El Molla, Egypt’s Minister of Petroleum and Energy Resources
The Minister made the remarks during a ministerial panel session at BHGE’s Annual Meeting in Florence on 28 January. He commented that Egypt has set a “new benchmark” with the development of the giant Zohr offshore gas field, which has transformed Egypt in the space of three years from a major LNG importer to an LNG exporter.
Adjusting the economic model with its partners to create a “win-win situation” had been a critical factor in this success, he said, to take into account the demand for increased investment and more advanced technologies with the move towards exploiting offshore and deepwater resources. The Minister commented on the increased focus of the IOCs on gas, with big projects for LNG plants and FSRUs going ahead.
Capitalising on the Zohr and other successes to create an eastern Mediterranean energy hub offers the prospect of boosting political stability and economic wellbeing in the entire region, he said.
“Our neighbouring countries in the eastern Mediterranean basin have good reserves of gas, and have made good discoveries, but they are not necessarily able to monetarise them because of the lack of markets. Hence the importance of co-operation.”
To this end, Egypt initiated the Eastern Mediterranean Gas Hub Forum two weeks ago, when ministers and officials from Egypt, Israel, Cyprus, Greece, Jordan, the Palestinian Authority and Italy came together and agreed to cooperate on facilitating the creation of a regional gas market in the eastern Mediterranean, promoting joint gas transport infrastructure projects in the region and deepening dialogue between the countries involved.
“We need to have synergies in order to capitalise on and develop this gas that is stranded in the water, so we can cooperate using our infrastructure and their gas resources and look to Europe as the potential customer for our gas,” the Minister said. “We need not only political stability but also political co-operation between the countries. We cannot work alone.”
The Minister commented that oil price volatility is a concern, which is “directly impacting investments and shaping the future of investment in the oil and gas sector.” The effect could be a shortage of oil production in the next three years, he said, underlining the role of OPEC+ in balancing the market to achieve sustainable oil production.
