Country
Assessment
No evidence regarding monetary penalties could be found in the sources consulted.
No evidence regarding the measurement and reporting requirements could be found in the sources consulted. However, industry studies suggest that the EGPC, as the joint venture partner, has access to flaring and venting data. The environmental impact assessment of oil and gas activities requires a monitoring plan, which should outline “monitoring intervals and reporting procedures” of the air emissions covered in the assessment. Article 17 of Executive Regulations 338, 1995 , requires regulated entities to maintain records. Article 18 empowers the EEAA to conduct inspections and tests to confirm the accuracy of records. Article 43 assigns some responsibilities to the EGPC. In early 2022, the EGPC signed a memorandum of understanding with a private company on a flare recovery initiative. The company will deploy a suite of tools to manage emissions via measurement, recovery, and utilization of flare gas.
PSCs require development plans. The initial plan describes the development concept for efficient exploitation of oil, gas, and condensate reserves to meet the needs of domestic and external markets. Upon a commercial discovery, the national company and the contractor produce a more detailed development plan, which is then submitted for approval by the minister of petroleum and mineral resources. A current map of the National Gas Pipeline Grid System is provided in an annex of a typical PSC; it has equal force and effect as other provisions of the PSC. The map is referenced in parts of the PSC that address the gas sales agreement; it is used primarily to identify the nearest connection to the pipeline grid. A recent PSC sets forth various fiscal terms relating to cost recovery, expenses, and production sharing . It allows for allocating gas (and, if gas is processed, liquefied petroleum gas [LPG]) that is not used in operations by the national company and the contractor. The PSC also provides principles and formulas to be used to determine the prices of gas and LPG. The prices for the local market are negotiated by the EGPC or EGAS and the contractor; the export price of gas is calculated as a netback value. These prices are used in the valuation of associated gas in cost-recovery calculations. The PSC provides details on the sales of gas and LPG in local and export markets, pricing and payments associated with such sales, and the rights of the EGPC and EGAS, as defined in the gas sales agreements.
No regulatory requirement to evaluate opportunities to minimize flaring and venting could be identified in available official documents. PSCs offer a structure for facilitating the sale of more associated gas to the EGPC and EGAS—and to other parties once the gas sector is reformed—for the local market.
The Ministry of Petroleum and Mineral Resources plays an overarching regulatory role in the oil and gas sector. Although there is no specific reference to flaring or venting in PSCs, contractors and operators are subject to Law 4 and the associated regulations. The ministry often acts through the EGPC, EGAS, and the Ganoub El Wadi Petroleum Holding as joint venture partners with companies investing in Egyptian upstream assets. The EEAA is part of the Ministry of Environment and is the environmental regulator responsible for conducting an environmental impact assessment of new upstream oil and gas projects, and monitoring emissions from combustion.
No explicit language on the authorization of flaring or venting could be identified in available official documents. The language in PSCs and Executive Regulations 338, 1995 , suggest that as long as flaring and venting were allowed under the development plan and the EIA—both overseen by the national companies in the joint venture—there is no need for a separate permit.
PSCs state that if associated gas cannot be used, the national company and “the contractor shall negotiate in good faith on the best way to avoid impairing the production in the interests of the parties.” One implication of this clause is that flaring or venting is not curtailed if doing so is detrimental to the project economics.
Article 5 of the 2021 proposal defines the tasks of the competent authorities. While performing the tasks, they shall cooperate with each other, with operators, and with their counterparts from other EU countries and the EC. Article 6 requires the competent authorities to conduct regular routine inspections such as site checks and field audits and document and record examinations. A note of remedial action shall be issued if a serious breach is detected. Routine inspections should be scheduled no less than every 16 months (as amended by the EP; see footnote 3); where inspection results revealed a serious breach, a follow-up inspection shall be conducted within nine months (as amended by the EP; see footnote 3). Nonroutine inspections shall be conducted following written complaints as per Article 7, or to detect leaks and the repairs thereof. The results of all inspections must be documented and made public within two months (see section 17 of this case study).
Article 8 of the 2021 proposal states that independent auditors—referred to as verifiers—shall verify that the emission reports produced by operators and importers comply with the requirements. The audits will have emission factors, calculation and sampling methods, risk assessments, and quality control as key review items, and also include site inspections. The results are to be packaged into a verification statement asserting that the emissions report complies with the requirements and specifying the verification work that was done. Where the assessment concludes that an emissions report does not comply with the requirements, the verifiers shall inform the operator, which shall submit a revised report. According to Article 9, the verifiers shall be independent from operators and shall conduct their mandated activities in the public interest. They shall also be accredited according to Regulation (EC) 765/2008. According to Article 10, for methane emissions data, verifiers, the competent authorities, and the Commission shall consider the information made available by the International Methane Emissions Observatory (IMEO). The EP amendments also require the IMEO to report “super-emitters identified by way of an early detection and warning system.”
Article 15 of the 2021 proposal bans venting except for a select few situations, such as emergencies, malfunctions, technical requirements, or safety reasons (as amended by the EP; see footnote 3). Technical requirements cover “pneumatic devices and pumps, dry gas seals, compressors, atmospheric pressure storage tanks, or other components designed to vent”; liquids unloading; and other activities necessary for safe operations. The EP amendments to Article 15 include new paragraphs on equipment standards. The amendments also require replacing equipment with zero-emission alternatives (if they exist) by the end of 2026, and the use of only zero-emission pneumatic controllers and pumps at newly built, replaced, or refurbished sites. In any event, operators can vent only if flaring is not technically feasible or entails safety risks. Besides these circumstances, Article 15 allows flaring only in situations where re-injection, own use, gas processing, or dispatch of gas to market are not feasible for reasons other than economic profitability.