The Oil Ministry wants to attract USD 7 bn of foreign direct investment (FDI) into the oil and gas sector in FY 2022-2023, ٌReuters reported Oil Minister Tarek El Molla as telling Sky News Arabia TV yesterday.

Oil + gas accounts for almost half of Egypt’s FDI: At least, it did in FY2019-2020, which is the most recent data the government has made available. Figures published in the central bank’s annual report (pdf) showed that USD 7.3 bn of the USD 15.8 bn of inflows went to hydrocarbons. Finance was the second-largest recipient, attracting USD 2.2 bn.

The sector has seen several high-profile investments in recent weeks:

• Apache and Sinopec signed a USD 3.5 bn production agreement in late 2021.
• Canadian firm Transglobe and London-based Pharos Energy this year signed E&P agreements worth USD 506 mn.
• Seven international energy companies were awarded exploration blocks in the government’s bid round held last year and will invest a combined minimum of USD 250 mn in the initial exploration phase.
• Qatar Energy agreed in December to acquire Shell’s 17% stake in two Red Sea exploration blocks.

Splurge on state-owned oil companies: The FDI target coincides with government plans to spend EGP 30 bn on developing public sector oil companies, which is reportedly the largest amount of money ever allocated to the state oil sector.

FDI has been heading in the wrong direction in recent years: Inflows fell 12% to USD 13.9 bn in FY2020-2021 from USD 15.8 bn the year before, and were down 15% from FY2018-2019. This has squeezed net FDI, which last year fell to USD 5.2 bn — its lowest level since the FY 2013-2014.