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Egyptian General Petroleum Corporation (EGPC): Egypt’s Tool for National Economic Development

By
Shawky Abdine
Shawky Abdine
Retired Chairman of the Gulf of Suez Petroleum Company
and
former member of the Board of Directors, Egyptian General Petroleum Corporation
Cairo, Egypt
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Published:
January 01, 2000

Abstract

Egypt was one of the world’s first commercial producers of petroleum, with oil having been discovered in 1868, commercial production established in 1909, and the first refinery in Africa being inaugurated in 1913. Since then Egypt had developed its petroleum industry into one of the country’s major economic sectors. Through adroit negotiations with the international oil companies, more than 240 agreements have been signed, a number of which have lasted more than three decades. Reserves of 35 Tcf of gas and 9 billion barrels of oil have been discovered in more than 100 fields and brought into production for the benefit of the country. With regard to foreign direct investment, more than $20 billion has been spent on operations. Following establishment of a domestic reserve basis for internal consumption, exports commenced in 1976 which have resulted in $25 billion of net profit to the nation.

The Egyptian General Petroleum Corporation (EGPC), which has been Egypt’s vehicle of economic development of the petroleum sector, has evolved since its antecedents were created in 1956. It has survived Egypt’s revolution, the natural death of the head of state, an assassination, a peaceful transition of power, and conventional elections. Through all of this, these contracts have continued to be honored, with the exception of a brief nationalization in 1962. The role of EGPC has been to develop a petroleum strategy for the nation, to implement this strategy and to regulate the resulting contracts, while at the same time maximizing the use of Egypt’s human and industrial resources. The major elements of EGPC’s success over a period of more than 40 years has been its flexibility, its ability to evolve as conditions within the industry change, transparency of contractual dealings, and its history of honoring its contracts. Today, it serves as role model for many of the developing nations around the world that would like to emulate its success.

This paper details the history of this vehicle of the nation’s modern economic development, from its origins to its modern state. It describes its role and its methodology in promotion, negotiations, supervision, and involvement in the management and operations of the resulting contracts. It highlights its missteps as well as its successes, and discusses the present results of its efforts. The paper concludes with lessons learned, including what still remains to be done in the constantly evolving nature of this organization.

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Contents

International Oil and Gas Ventures: A Business Perspective

George E. Kronman
George E. Kronman
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Don B. Felio
Don B. Felio
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Thomas E. O’Connor
Thomas E. O’Connor
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Mindy S. Kronman
Mindy S. Kronman
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American Association of Petroleum Geologists
ISBN electronic:
9781629810683
Publication date:
January 01, 2000

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