Egyptian Oil and Natural Gas

Dramatic events are unfolding in Egypt at present. Rather than comment on these, I thought it interesting to look at Egyptian oil and natural gas production in the light of Egyptian peak oil.

Egyptian oil production peaked in 1996 just over thirty years after the peak in discovery in 1965. Recently, there has been a bounce in production since 2005, but it is likely that production will soon resume its' decline.

Egyptian oil consumption has been on a more or less increasing trend since 1970 and now more or less matches production. Egypt has a young and growing population of over 84 million and demand for oil can be expected to increase.

Net exports of oil from Egypt peaked in the early 1990's and have now virtually ceased.

Increasing consumption and a decline in production in the years ahead will result in Egypt joining oil importing countries competing for ever scarcer oil exports on the world markets.

With Brent oil having just gone above $100 a barrel, this is an expensive time to be an oil importing country. According to the BBC's country profile for Egypt, petroleum, petroleum products and cotton are Egypt's main exports. The outlook for oil exports doesn't look too promising from the figure above, although the prospects for natural gas are slightly better.

Natural gas production in Egypt is growing, but so is consumption. Natural gas production in Egypt is forecast to peak in 2017 (Colin Campbell, Siobhan Heapes, An Atlas of Oil and Gas Depletion).

According to Tom Whipple, a retired US governemnt analyst (who writes in the Falls Church News, whose readership must be the best informed on peak oil issues), Egypt has large natural gas reserves and exported 646 billion cu. ft. in 2009. Seventy percent of this was in the form of LNG and the rest via pipeline to Israel, Lebanon, Jordan, and Syria. Egypt produces about 685,000 b/d of oil, but is now consuming about 710,000 b/d.

On the 5th February 2011, a fire at a natural gas exporting facility halted gas exports to Jordan and Israel, as reported by Bloomberg.

Meanwhile, US Secretary of State Hilary Clinton said at the meeting of the Middle East Quartet in Germany: "The region is being battered by a perfect storm of powerful trends."

"This is what has driven demonstrators into the streets of Tunis, Cairo, and cities throughout the region. The status quo is simply not sustainable."

She said that with water shortages and oil running out, governments may be able to hold back the tide of change for a short while but not for long.

So there we have it. Middle East oil is running out.