Overview of Hydrocarbon Regulation in Egypt

The extractive industry in Egypt is regulated by the Egyptian Ministry of Petroleum and its subsidiaries like the Egyptian General Petroleum Corporation (EGPC). Generally, terms in the Egyptian oil and gas sector are favorable for international oil companies (IOCs), according to the Revenue Watch Institute.

There is relatively little legislation for the Egyptian hydrocarbon sector and no general oil or gas law exists. Most of the respective regulations define the establishment, duties and functions of Egypt's state-owned entities with the EGPC being charged with managing upstream activities including infrastructure, licensing, and production. IOCs active in Egypt have to agree on a production-sharing basis with EGPC. However, EGPC retains the right to take a 50 percent share in the ventures formed with IOCs. In particular the "Investment Incentives Law No.8" of 1997 governs foreign investment and guarantees the prohibition of nationalisation, confiscation, and freezing of assets. Furthermore the law guarantees the right of 100 percent foreign ownership of ventures active in downstream.

Regarding the gas sector there has been the ongoing policy in Egypt to allocate one-third of proven natural gas reserves to the domestic market, so that foreign companies must direct all or a portion of its production to the local market, as to meet domestic consumption.

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