Bidding for the complex is under way, with the farm expected to come online in 2016, Hassan Younis, Egypt’s minister of electricity, said at a wind energy conference in Cairo last month. The contract will be awarded before the year is out, Professor Galal Osman, the president of the Egyptian Wind Energy Association, told The National yesterday.

The tender represents one of several wind energy projects that are intended to provide a total of 7,200 megawatts by the end of the decade. Egypt generates only 550 megawatts from wind.

Yet the Egyptian government hopes that, together with solar and thermal power, wind energy will cover 20 per cent of all domestic electricity demand by 2020. Wind turbines will provide 12 per cent of all alternative energy, said Prof Osman, as the government is looking to capitalise on its vast potential.

“The wind conditions in Egypt are among the best in the world,” said Stefan Gsänger, the secretary general of the World Wind Energy Association, which organised the Cairo conference.

Existing capacity is state-owned, but a two-step plan is in place to introduce private ownership. While 33 per cent of the added capacity will be owned by the government, the remaining 4,825 megawatts will be generated by private companies under the build-own-operate (BOO) model.

Experts believe that private investment in wind energy will depend on the introduction of a feed-in tariff, which reimburses producers for the cost of production not covered by electricity prices. Feed-in tariffs are in place in virtually every country that generates electricity from wind or solar power. In the Middle East, where fossil fuels are heavily subsidised, renewable energy would not be competitive without financial incentives. “With existing subsidies, investment in renewables is not viable without compensation,” Mr Gsänger said.

Egypt is working on a feed-in tariff, scheduled to come into existence next year. It will be based on the prices quoted by private companies bidding for the BOO contracts, Mr Osman said.

Investing in wind power not only diversifies Egypt’s electricity sources, it will also provide the government with an opportunity to create much-needed jobs. High unemployment, especially among the young, was the primary reason behind the popular unrest that unseated Hosni Mubarak, the president, after 31 years in power.

“A well-established wind energy industry can create tens of thousands of jobs,” Mr Gsänger said.

Source: www.thenational.ae

BP has also been accused of working “hand in glove with dictatorship” while Vodafone is under fire for bowing to presidential pressure to shut the mobile telephone network down.

BP, which has sunk $14bn into oil operations and is hoping to double production there, said “hundreds” of employees or their dependents were being evacuated from Cairo and some drilling operations had been halted.

BG, formerly part of British Gas, said it had closed its Cairo office and flown home all non-essential expatriate staff from Egypt, but its production of liquefied natural gas goes on.

Vodafone has flown 25 people and their families back to the UK in recent days, the company’s chief executive Vittorio Colao disclosed.

The boss of the world’s biggest mobile phone operator added that two of its Egyptian employees are known to have been injured in rioting between supporters and opponents of Mubarak. One of the two is missing, and the company is trying locate him.

And British banks such as Barclays, airlines such as BA and others with exposure to the growing Middle East market have seen their shares hit as investors worry about the damage to UK plc from the turmoil in the region.

BP has been criticised by the non-governmental organisation Platform, which claims the oil company had with other British and American oil companies “worked hand in glove with dictatorship.”

The environmental and social justice group also said Hesham Mekawi, the BP Egypt chairman, has praised “the stability of the country” and claimed BP had allowed the American Chamber of Commerce in Cairo – of which it is a member – to put pressure on US Congress not to support a recent motion calling on Mubarak to hold fair elections and respect human rights.

BP said it had played a constructive role in Egypt which had benefited the entire population. “We’ve been in Egypt for 40-plus years as a major investor in the country’s industry, employing a well-trained workforce in quality jobs, supplying significant amounts of energy to meet the rapidly growing population’s needs,” said a spokesman.

BP has made Egypt one of its top priorities after a major gas find in the Nile Delta last summer. It hopes to more than double its oil and gas production to over 320,000 barrels a day – almost a tenth of its global output.

Meanwhile Vodafone’s Collao said: “We have also suffered some ‘infrastructure damage’,” which he defined as mobile stations out of action due to fuel shortages, or because Vodafone staff are unable to provide essential maintenance.

The British company owns 55% of Vodafone Egypt which employes around 6,000 and has nearly 29m customers.

Colao defended his decision to shut down its mobile phone network in Egypt last week on the regime’s orders. “The network was down for 24 hours. We didn’t have any option as the government was within its rights under emergency powers that it invoked after the outbreak of demonstrations.”

He said disruption to services is continuing with many Egyptian customers unable to send text messages, but that the network was operational for those taking advantage of ‘roaming’ agreements between different operators.

“Our main concern at the moment is for the safety of the people of Egypt and our colleagues. But we are not telling people to stay at home, some employees can work their shifts. This is a very fluid situation.”

Last year, Vodafone was approached by its Egyptian partner, Telecom Egypt, with an offer to buy out the British company’s stake. But talks broke down because the two sides couldn’t agree a price.

Vodafone reckons its holding in its Egyptian joint venture will rise in value because only around 70% of Egypt’s population owns a mobile phone, whereas in Europe there is saturation coverage.

Source: www.guardian.co.uk

The report added that recently conducted global studies asserted that Egypt achieved in the last decade the highest rate of success on prospecting and exploration activities in Northern Africa region and that total reserves discovered of oil and natural gas exceed those found in Libya, Tunisia and Algeria combined.

It also affirmed that this hike in stockpiles that was achieved in the first decade of this century is due to sustained development of exploration and drilling programs and plans as well as expanding the search areas into various regions of Egypt whether the land or the marine ones.

The Mediterranean is one of the most attracting for foreign investment among world regions due to its huge probable reserves of natural gas and that both Mediterranean and Nile Delta regions contain unexplored reserves of natural gas estimated at 223 trillion cubic metres, it added in a reference to the reports issued by the U.S. Geological Survey last May.

Further, these reports pointed out that these two regions, namely the Mediterranean and the Nile Delta, have unexplored reserves of crude oil and condensates in what puts them on the list of the most important world regions regarding probable natural gas reserves.

Finally, the EPA report drew attentions to the significance of the oil agreements inked by Egypt with international major corporations at a value of USD 8 billion in (2009-2010) with the total value expected to be increased in the coming period following the announcement made by global oil firms on raising their investment in Egypt.

Source: www.english.globalarabnetwork.com

The targeted output capacity of Al-Barak, the first oil field in South Egypt, totals 2,500 barrels per day (bpd).

The New Year will see the start of regular production of Egypt’s first gold factory located at Jabal (mount) Al-Sukkari, Al-Sharqiya Governorate, the statement affirmed.

It put the initial output capacity of the factory at 200 ounces per year in the first two years. The output will rise gradually to hit 500,000 ounces a year in the following stages of the 20-year term of the project, according to the statement.

The explorations for gold will intensify in the remaining sectors of the mount with a view to increasing the country’s reserves estimated at 13 million ounces.

The ministry is preparing to sign in 2010 six agreements with winners of the international tender cast in last year.

The documents will push to 14 the number of licenses for international bidders on gold exploration and production, it revealed.

The country’s two largest petrochemical plants, involving USD 1.7 billion investments, will also start operation in 2010.

The Methanol Complex in the Mediterranean city of Damietta, costing USD 950 million, has a production capacity of 1.3 million tons a year.

The projected output capacity of the Polypropylene Complex in Port Said which cost USD 790 million, hits 400,000 tons a year, the statement added. (KUNA)

Source: www.globalarabnetwork.com

Falling investments and increasing delays in energy sector projects because of the global meltdown could lead to oil spiking to over $200 per barrel, Egypt’s oil minister warned today, highlighting industry concerns that supply will fall short of demand once the world rebounds from its current recession.

Sameh Fahmy, in concerns echoed loudly by oil executives at a gas conference in the Egyptian capital, said that global investments and contract signings had fallen sharply over the second half of 2008 as crude collapsed from a record high of almost $150 per barrel and banks, struggling to remain solvent, sharply reigned in lending. But oil and gas production costs had only dropped by 5 to 10 percent.

“We are in a period of extreme slowness” on the global level, Fahmy said, adding that fears about last year’s price spike in crude would be quickly eclipsed if investments – key to generating new supply sources – are not sustained.

Crude could go to “over $200 (per barrel) in a period of two or three years if we don’t all act quickly now,” Fahmy said.

Oil officials and executives have repeatedly warned about another price spike as falling investments hamper efforts to tap new supply to meet a rebound in demand once the world economy picks up again. As companies are forced to go deeper offshore, or explore in difficult terrain to secure new resource reservoirs, production costs are also expected to remain high.

Industry executives, while echoing Fahmy’s concerns, were also eager to show how they are stepping up to meet future energy needs even as the slide in oil prices challenges the economic viability of a number of major oil projects worldwide.

Italian energy giant Eni and Egypt’s Petroleum Ministry announced new initiatives aimed at developing oil and gas reserves in the country. They included a 10-year extension of the license for the giant Belayim field in which Eni operates with a 100 percent stake and evaluating various alternatives for the defining of a commercial framework to allow the development of natural gas at high depths.

Eni said in a statement that the gas initiative was aimed at meeting growing Egyptian demand and “optimizing export opportunities.” It also said it was committed to spending $1.5 billion in 5 years in investments, operating costs and other efforts in Egypt.

Meanwhile, Tim Blackford, the head of BG Group in Egypt said the British gas firm intended to “get with our partners to sanction a further $1 billion investment this year and potentially a $2.5 billion project commencing next year.”

Blackford also said the company, which accounts for about 15 percent of Egypt’s total foreign direct investment, had been awarded an offshore block in the latest Egyptian Natural Gas Holding Company licensing round. He did not identify the block.

On the global scale, Shell’s Egypt country chairman and managing director, Ahmed Atallah, said that too often, officials forget the cyclical nature of the oil industry. The oil giant intends to “invest through the cycle and look to reap the benefits when the upturn comes again,” Atallah said, adding the company expects its investments this year to hit between $31 or $32 billion.

The decline in oil prices, however, has squeezed such spending plans for smaller companies and even some of the giant state-run companies which control the overwhelming majority of the Middle East’s vast oil wealth.

Officials from a number of Organization of the Petroleum Exporting Countries member states have indicated that they would like to see crude prices in the $75 per barrel range to spur spending while providing producers with a fair price to cover costs.

After months of seeing oil hover at around $40 to $50, OPEC appears to be witnessing the benefits of its earlier output cuts of 4.2 million barrels per day from September levels. The benchmark light sweet crude oil contract for June delivery pushed past $60 for the first time since early November before settling at $58.85 a barrel on the New York Mercantile Exchange on Tuesday.

But the volatility in the market remains the key factor as demand forecasts for oil in the first half of 2009 remain weak. The producer bloc is slated to meet later this month to weigh whether further production cuts are needed.

The Egyptian oil minister, whose country is not an OPEC member, stressed that the world today is “not like 1930,” at the time of the Great Depression. “The world can return quickly and … cope with challenges,” he said. “Some industries and sectors in the world can handle delays (in investments), but not the oil industry.”

“If we are late, the bill will be high for all,” Fahmy said.