Gas reserves in the Middle East can create opportunities for employment, business and peacemaking, according to Egypt's petroleum minister.
Amid a push by Egypt to transform itself into a regional gas hub, the country hosted the East Med Gas Hub earlier in January and gathered officials from Israel, Cyprus, Greece, Jordan, Italy and Palestine. Speaking Monday at the BHGE Annual Meeting in Florence, Italy, Egypt Petroleum Minister Tarek El-Molla told CNBC that the commodity can aid the peace process in the region.
"We were very proud to host the Palestinians the Israelis, sitting together in one room, on the roundtable together with other neighboring countries like Greece, Cyprus, Jordan and Italy," he told CNBC's Steve Sedgwick.
"So the benefit will be there and the welfare will cover all the countries because gas will be the cause of the revenues to generate opportunities, job opportunities, business opportunities and it will bless all the people there (in the Middle East) hence it is the catalyst and it will be the peacemaker really," he added.
Cairo is expected to become a net gas exporter by the end of 2019 and El-Molla noted that the country is seeing outside interest into the sector — particularly after the success of Egypt's Zohr gas field, an offshore natural gas field in the Mediterranean Sea operated by Italian energy firm Eni.
"We've seen a lot of interest from international oil companies coming into different opportunities we're offering in Egypt, whether in new frontier areas like the Red Sea, or the western side of the Mediterranean in Egypt."
"We are still on track and we are really increasing and accelerating all the oil and gas activities in Egypt. We've got momentum and with the success of the first phase of Zohr (a natural gas field in Egypt), we are more confident that we can do much bigger, much better and similar projects," he said in Florence.
IMF program
Foreign direct investment (FDI) in Egypt's oil and gas sector reached $10 billion in the full fiscal year of 2017/18, El-Molla told an Egyptian newspaper last August, and expects at least the same in 2018/2019. In December, El Molla said Egypt had signed over 12 exploration and production agreements with international oil companies (IOCs) during 2018.
While the oil and gas sector might be a boon to the government in terms of attracting foreign direct investment, the government wants to attract more investment into other sectors. The Arab Spring of 2011 and the overthrowing of then-President Hosni Mubarak unsettled investors into Egypt and it was forced to request a three-year, $12 billion loan from the international Monetary Fund (IMF) in 2016.
A condition of the loan was that Egypt embark on a reform program that included cutting fuel subsidies, introducing VAT and floating its currency, the Egyptian pound. Egypt has been praised by the IMF for adhering to the program and the Fund sees its budget deficit and unemployment rate declining further this year. the IMF predicts GDP growth of 5.5 percent in 2019.