Egypt’s petroleum sector: Sherif Ismail & Tarek al-Molla: never change a winning team

The new cabinet lineup unveiled by Prime Minister Sherif Ismail sends out positive signals to Egypt’s foreign partners. Egypt faces daunting challenges, starting with a relatively unstable security situation and a notable surge in terrorist activity since the ousting of former President Mohammad Mursi, which has scared away badly needed foreign investors, and affected tourism, one of Egypt’s most vibrant sectors. The new government is also seen as a response to corruption scandals and a growing discontent among the population over economic hardships. Ahead of the parliamentary elections (starting October 2015), it is key, for Sisi and the new government, to, at least appear to be making progress on all these fronts.

Another sector Egypt strongly relies on to improve the economy is the energy sector. Here too, the cabinet lineup was designed to send the right signals to Egypt’s partners. By appointing Sherif Ismail as Egypt’s new Prime Minister, President Abdel Fattah al-Sisi sought to reward one of the most effective ministers in recent years. Indeed, the performance of the energy sector, culminating with the discovery of Zohr, has contributed to elevating the standing of the former Petroleum Minister. The appointment of Tarek al-Molla (Tariq al-Mullah) as Petroleum Minister is a good indicator that Egyptian authorities are determined to pursue the same policy that has sought to revive Egypt’s petroleum sector over the past year.

Al-Molla is seen as one of the key figures influencing the State’s petroleum policy, advancing bold new measures such as the decision to cut down subsidies, by about a third so far, with a view to phasing them out completely within five years. He has repeatedly acknowledged that any improvement in petroleum production in Egypt inevitably passes by attracting and assuring investors, which in turn relies on paying out the debt owned to foreign companies and introducing pricing reforms. He is seen as the man behind the plan to control the electricity crisis, through, among other things, the acquisition of FSRUs permitting LNG imports. The synergies that characterized the work of the former Petroleum Minister and the former head of the Egyptian General Petroleum Corporation and the vision they share for Egypt’s energy sector will also be reflected in their new responsibilities as Prime Minister and Petroleum Minister, thus ensuring a smooth continuity.

Prior to his appointment as Petroleum Minister, Tarek al-Molla served as Chairman of EGPC since August 2013, after serving as vice-chairman for foreign trade since 2010. He was born in 1962 and holds a degree in Mechanical Engineering from Cairo University (1986). A year after graduating, he joined Chevron where he held various positions between 1987 and 2010. Given his profile, technical expertise, and policies followed since he assumed responsibilities at EGPC, his appointment as Petroleum Minister is expected to reassure investors and will contribute to restoring confidence in Egypt’s energy sector.

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