Egypt


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Egypt is the largest non-OPEC oil producer in Africa, with crude oil production at 711,500 barrels a day in 2011. It is also the continent's second-largest natural gas producer, supplying 2.2 trillion cubic feet in 2010. The petroleum industry accounted for 10 percent of government revenues in 2011 and 38 percent of exports. Under former President Hosni Mubarak the sector was widely linked to corruption. The political unrest in 2011 did not significantly affect foreign investment in the petroleum industry or disrupt production, and Egypt's revolution has not yet resulted in regulatory changes.


Egypt's Performance on the Resource Governance Index

Egypt ranks 38th out of 58 countries. With similar performance on all four components of the RGI, Egypt's overall "weak" score of 43 suggests there has been only incremental progress toward greater transparency in this crucial economic sector.

Rank
(out of 58)
Score
(out of 100)
38 Composite Score 43
48 Institutional & Legal Setting 40
Freedom of information law 0
Comprehensive sector legislation 100
EITI participation 0
Independent licensing process 50
Environmental and social impact assessments required 50
Clarity in revenue collection 67
Comprehensive public sector balance 50
SOC financial reports required 0
Fund rules defined in law N/A
Subnational transfer rules defined in law N/A
35 Reporting Practices 44
Licensing process 83
Contracts 0
Environmental and social impact assessments 0
Exploration data 50
Production volumes 50
Production value 33
Primary sources of revenue 56
Secondary sources of revenue 33
Subsidies 100
Operating company names 67
Comprehensive SOC reports 50
SOC production data 33
SOC revenue data 11
SOC quasi fiscal activities N/A
SOC board of directors 50
Fund rules N/A
Comprehensive fund reports N/A
Subnational transfer rules N/A
Comprehensive subnational transfer reports N/A
Subnational reporting of transfers N/A
38 Safeguards & Quality Controls 48
Checks on licensing process 56
Checks on budgetary process 33
Quality of government reports 61
Government disclosure of conflicts of interest 100
Quality of SOC reports 33
SOC reports audited 0
SOC use of international accounting standards 0
SOC disclosure of conflicts of interest 100
Quality of fund reports N/A
Fund reports audited N/A
Government follows fund rules N/A
Checks on fund spending N/A
Fund disclosure of conflicts of interest N/A
Quality of subnational transfer reports N/A
Government follows subnational transfer rules N/A
25 Enabling Environment 40
Corruption (TI Corruption Perceptions Index & WGI control of corruption) 37
Open Budget (IBP Index) 54
Accountability & democracy (EIU Democracy Index & WGI voice and accountability) 16
Government effectiveness (WGI) 40
Rule of law (WGI) 52
Satisfactory Weak
Partial Failing
To explore all data and compare
scores, use the RGI Data Tool.

Institutional & Legal Setting (Rank: 48th/58, Score: 40/100) learn more

Egypt's "failing" score of 40 reflects incomplete disclosure requirements despite a detailed legal framework governing the petroleum sector.

The Petroleum Ministry oversees the oil and gas sector, but state-owned companies grant extraction rights. Agreements follow a model joint venture contract approved by parliament and published as a law. Companies pay a share of production, income taxes, and bonuses to a state-owned company, which transfers these revenues to the Finance Ministry. The process of awarding contracts is designed to be competitive and includes rounds of auctions, but it is unclear how winning bids are ultimately selected.

Environmental impact assessments are required. There is no freedom of information law, although the 2012 Constitution includes a provision referring to access to information as a right.

Reporting Practices (Rank: 35th/58, Score: 44/100) learn more

Government data on most aspects of the petroleum sector is incomplete, resulting in a "weak" score of 44.

While text of a model contract is publicly available, final contracts are not published in full. Egypt's official gazette, al-Garida al-Rasmiyya, is seldom available to the public, making it difficult to find decrees authorizing exploration and extraction. Environmental impact assessments are not published, limiting public scrutiny prior to extraction.

The Finance Ministry follows substantial reporting policies, but publishes little information specifically on hydrocarbon revenues, and has not reported anything since the revolution. Previous annual reports included data on foreign investment in the industry and the cost of petroleum subsidies. The Petroleum Ministry publishes data on production volumes, but almost no information on resource revenues. Its last report covered 2008-2009. Annual Central Bank reports include the value of petroleum exports and foreign investment.

Safeguards & Quality Controls (Rank: 38th/58, Score: 48/100) learn more

Egypt's "weak" score of 48 is due to a lack of effective government monitoring and insufficient auditing requirements.

While Parliament must approve all contracts, there is little legislative oversight of the petroleum sector and no mechanism to appeal licensing decisions. The national audit agency has the authority to review extractive revenues, but there is no evidence that it actually does, and auditors do not regularly report to lawmakers. Government officials must provide information about their financial interests.

Enabling Environment (Rank: 25th/58, Score: 40/100) learn more

Egypt received a "failing" score of 40, performing especially poorly on rankings of democracy and government accountability.


State-Owned Companies (Rank: 34th/45, Score: 31/100) learn more

Three main companies, all government-owned, are involved in hydrocarbon extraction. The largest is the Egypt General Petroleum Company (EGPS), followed by the Egypt Natural Gas Holding Company (EGAS) and the Ganoub el-Wadi Petroleum Holding Company (GANOPE). Their reporting practices vary. EGAS and GANOPE publish annual reports containing some information on revenue generation; EGPS does not. None publish a breakdown of taxes paid to the government. EGPS does publish information about bidding rounds, including relevant legislation and commercial terms for auctions. It is unclear whether the companies' reports include data from all subsidiaries, and their accounting procedures do not appear to meet international standards.

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