Registration number: 18124512

Major: Hospital Management

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Strategic plan for the digital transformation of the Ministry of Petrol
in Egypt in a manner that achieves the strategic goals in accordance
with the Egypt Vision 2030

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Table of Contents
Introduction 4-7
Petroleum sector Overview 7-9
Mission 8
Vision 9
External environment assessment 9-11
PESTEL analysis 9-11
Internal environment assessment 11-14
Quadratic analysis 14-18
SWOT analysis 14-15
TOWS analysis 16-17
QSPM MATRIX 17-18
Strategies can be used 19-21
Corporate level strategy (intensive strategy) 19
Business level strategy ( cost leadership strategy) 19
Petroleum sectors needs for achieving strategies…………………………………………………………………………. 20

Strategic objectives 22
Internal Policies and procedures 22-23
Control and evaluation mechanisms 23-26
Implementation matrix 23-26
Future dream of petroleum sector27
References 28
Figures
Figure1 Global Oil Prices amid COVID-19 (USD/barrel)…………………………………………………………………………………………… ………………………………… 10

Figure 2 Gas production rates…………………………………………………………………………………………………………………………………………………………………...20

Figure 3 Gas production distribution……………………………………………………………………………………………………………………………………………………….. 20

Pictures

Picture 1 17sustinable development Goals ………………………………………………………………………………………………………………………….. 4

Picture 2 top 10 connected worker device Market…………………………………………………………………………………………………………………..5

Picture 3 Digital Transformation in Oil and Gas discussion panel …………………………………………………........................................... 7

Picture 4 PESTEL factors…………………………………………………………………………………………………………………………………………………………...9

Picture 5Map of the New acquired 2D MC in the West Mediterranean………………………………………………………………………………………………………….13

Picture 7: digital in midstream ………………………………………………………………………………………………………………………………………………27

Picture 8: digitizing the future oil field…………………………………………………………………………………………………………………………………..27

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1-Introduction

The Sustainable Development Goals (SDGs), were followed by all countries within the world as
a global action to beat poverty, and confirm that everyone has peace and safety by 2030.
The SDGs define that improvement in one sector will affect the other sectors, and
improvement should be balanced between the social, economic, and environmental
sustainability and profitability.

Picture 1 17SDGs https://blog.aiesec.org/sustainable-development-what/

In accordance to the 2030 agenda, the Egyptian Government has launched a working plan
called Egypt’s Vision 2030 (Sustainable Development Strategy). The SDS promotes economic
improvement supported justice, social integrity and participation. It’s under the SDS that every
development plans in Egypt are incorporated at the identical time and guided by the
Sustainable Development goals. (https://www.eg.undp.org/content/egypt/en/home/sustainable-development-
goals.html)

After corona virus pandemic infection, world is changing very rapidly and affected in several
fields, because the results of this pandemic the economy of scale is modified exponentially.
Oil and gas companies had faced challenges to their sustainability, profitability and efficiency.
As a results of the pandemic Covid 19, prices have collapsed and one in every of the clearest
and most viable responses to those systemic challenges is to accelerate digitization strategies
to assist remain attractive to investors.
The most important action which will improve and mange this sort of Pandemic within the
simplest manner is using the digital transformation mechanism as so on achieve to our vision
smoothly as called “Egypt2030”. And without using the new approaches of technologies and
digital transformation methods in a different fields in Egypt the quantity of threads thanks to
this virus will exposed and increased exponentially.
Digital transformation is the process of using digital technologies which is able to modify the
present business process to cope up with the fast change in worldwide that happened during

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this pandemic and also to suit the necessities of the market and therefore the demand of
consumers additionally.
As the world facing the challenges of COVID-19, implementing connected worker technologies
and creating a data-driven work environment may quickly become an increasingly important
priority.
Digital transformation shaping the industry’s future within the world and make the employees
integrated to their environment, connected to other workers and supported by their working
system. (capitalist, 2020)
Operator supported by working system which respond in effective time, field worker use
platform for information and improving workflow, engineers know the essential KPIs of
productions and maintenance on time and executives use data to drive strategy and enhance
higher cognitive process . (capitalist, 2020)
By digitalization the petroleum industry field will gain many benefits as: reduce human error,
increase productivity, time efficient, enhance safety of workers, improve decision making and
permit monitoring of assets.
Some sorts of digital information technology can be used in petroleum sector:
Platform: which uses data to permit employees to form applications and control manufacturing
processes remotely.
Smart sensors: provide a more holistic overview of business in real time and forestall
dangerous incidents.

Building Maintenance and Management: access real time information and connect with
maintenance workers on site to resolve issues quickly.

Task Management: Operators in industrial settings such like oil exploration field can control
activities in remote locations. They will also enable field personnel to attach with experts in
other locations.

Picture 2 top 10 connected worker device Market

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Digital Transformation contains a main 4 pillars: Employees Empowerment, Customers
engagement Operations Optimization and Products Transformation.
https://www.communicationsquare.com/news/what-is-digital-transformation/

On 2nd December 2019, Eng. Tarek El Molla, Minister of Petroleum and Mineral Resources,
affirmed that Egypt has ready to take large steps within the economic and structural reforms at
various sectors, which contributed to improving economic indicators and Egypt's credit rating,
that's within the framework of implementing a comprehensive Egyptian program for economic
reform within Egypt's 2030 strategy, so as to boost economic status through variety of giant
development projects. (Molla, 2019)
At the discussion entitled "Digital Transformation in Oil & Gas Summit" at Cairo International
Communication and Technology Conference held under the patronage of President Abdel
Fattah El-Sisi. (Molla, 2019)

Towards Egypt's 2030 strategy the Ministry is lunched a strategy for the Sector's
Modernization, with a unified vision, aiming at achieving the optimum economic exploitation
of natural resources, likewise as transforming Egypt into a regional hub for oil and gas trade.
And its role as a key player in implementing Egypt's 2030 vision. (Molla, 2019)

This program aims at achieving the goal in supporting the digital transformation in all the
sector's domains and incorporating Enterprise Resource Planning (ERP) system within the
sectors' companies, linking them together, to exchange information easily and facilitate for
decision makers. Moreover, the applying of resource planning programs, in cooperation with
the international companies to limit the paperwork in many companies and to produce just
one source for information, thus, increases reports' accuracy and acceleration of completing
processes. (Molla, 2019)

Egypt's Electronic Portal project for marketing petroleum blocks for exploration, in
cooperation with Schlumberger Co. is already underway, which allows international companies
to spot available investment opportunities, and promoting them with practical mechanisms to
draw in investment. (Molla, 2019)

Applying software in various activities of the sector, including Industrial control system (ICS),
improving the refineries efficiency, data analysis by a way that enables continuous and
sustainable production, confronting exceptional events, immediate data analysis, issuing
reports to support decision-makers and enhance HSE.
At the tip of his speech, the Minister indicated that the Ministry's vision for modernization
adopts implementation of the human cadres and youth program, to enable them for vital
practices and leadership, believing that using technology without qualified human cadres, will
not achieve the desired goals. (Molla, 2019)

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 Picture 3 Eng. Tarek El Molla, during his Participation at Cairo ICT 2019, Digital
Transformation in Oil and Gas Summit 1

In my point of view the most important objective of inventing the digital transformation in our
country is to deliver a VALUE for the customer either employee or consumer.

1- Overview about the Petroleum sector in Egypt

The Egyptian Petrol Sector is the highest economic sectors in Egypt and is regarded as the main
part of the economic improvement plans and has significant role in providing the energy.
(petroluem, 2020)
There is no doubt that role of the Petrol Sector is to meet the market needs of petroleum
products and working on it’s as a source of foreign investment. The Petrol Sector demands hard
and flexible performance by its workers with a new gasp that go in accordance with building
the Egypt 2030. (petroluem, 2020)
The Petroleum Sector's human resources are of the highest important productive department
and they represent the main driving force of its progress there are 283 thousand employees in
the Petroleum Sector.
The total number of different petroleum companies is 159, without adding the General
Petroleum Corporation and the 3 holding companies, They are divided into three types:
“public”, which are state-owned and “joint”, in which the foreign partner contributes in
proportion to oil research and exploration companies and production companies And the
"investment", which was established according to the investment law, and it is subject to it.
The number of public sector companies is 12 companies, while the number of production
companies is about 43 companies, then the joint sector companies numbering 41 companies,
then the investment sector companies amounting to 103 Companies. (petroluem, 2020)
There are 3 holding companies affiliated with the Ministry of Petroleum: the Petrochemical
Holding Company, the South Valley Petroleum Holding Company, and the Natural Gas Holding
Company (EGAS).

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Mission

To Support oil and gas reserves and increasing their production. Meeting the Egyptians population
demand of oil, gas and petrochemicals and Creating comprehensive development and change in
the various activities of the petroleum sector and mineral resources, in order to increase its
contribution to the comprehensive development of Egypt through working more efficiently,
attracting more investments, developing human cadres and improving their efficiency through
training plans.
Mission Analysis:
Mission component Mentioned Not mentioned
Service provided √ (supporting oil and gas reserves and production )
Customer √ (Egyptians population)
Market √ (Egypt )
Technology - √
Growth and profitability √ (comprehensive development of Egypt)
concern
Philosophy √(Working more efficiently, attracting more
investments, developing human cadres and
improving their efficiency through training
plans.)

social, community, and √ (to increase its contribution to the

environmental concerns comprehensive development of Egypt)
Concern for employees √ (Developing human cadres and improving
their efficiency through training plans.)

Mission statement reformulation

To Support oil and gas reserves and increasing their production, Meeting the Egyptians population
demand of oil, gas and petrochemicals and Creating comprehensive development and change in
the various activities of the petroleum sector and mineral resources, in order to increase its
contribution to the comprehensive development of Egypt through Leverage the power of
information Technology as a strategic enabler for Sector’s Modernization ,working more efficiently,
attracting more investments, developing human cadres and improving their efficiency through
training plans.

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Vision
By 2021, to continuously unlock the Sector's full value chain potential as a growth and a
sustainable development engine for Egypt to achieve financial sustainability, Become a leading
regional Oil and Gas hub, be a role model for the future of modernized Egypt and Take into
consideration the Sector Core Values.

Vision analysis
vision is clear , concise and look on to the future which is inspirational and motivating that identify the
petroleum sector strategic target for which the sector focus its resources and take into consideration
the sector core values.

2- The external environment assessment

The main objective of the External Environment Analysis is to define and understand the opportunities
and threats that have an impact on our organization and affect the organization operation, resources
allocation, and sustainability

3-1 Remote Analysis or Macro Environment Analysis (PESTEL analysis):

.
1- Political factors

1-a: Global political factor

 Geopolitical conflicts. (Threats )
 The majority of the governments of the oil
producing countries control more than 90% of
the oil reserves and over 75% of global oil and
gas production. (Threats )
 Large amount of oil and gas in a country can
begin wars (Threats )
 The relationship between the value of US dollar and
oil prices (Threats )
 petroleum policies of OPEC (opportunities) picture 4 PESTEL factors
 Gas Exporting Countries Forum organization policy (opportunities)
 threats come from neighboring countries: Ethiopia , Libya and turkey with the
probability of war (Threats )

1-b: Local political factor

 Governmental instability (Threats )

 The Egyptian government has launched the 2030 improvement plan and undertaken
multiple serious decisions regarding tax. (opportunities)

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 2- Economic Factor
The connection between oil – gas industry and the global economy is very important and for
that reason are interact each other that the global economic growth increase the global
consumption of oil and gas.  
 Global Economic crisis due to Covid 19 infection
(Threats )
 Interest rates(Threats )
 Inflation rates (Threats )
 investment laws and regulations (opportunities)
 low income level (Threats )
 Many of informatics system as(Enterprise Resource
Planning ERP, Electronic Portal and Industrial
control system ICS ) are very expensive (Threats )
Figure 1 Global Oil Prices amid COVID-19
(USD/barrel)
Source: OPEC and media reports
 High cost of training personnel on this new technology. (Threats )

 Insufficient funding (Threats )

After Covid 19 and decrease in oil prices The Ministry of Finance has cut half its expenditure on

fuel subsidies. In financial year 2020/21, it is allocating EGP 28.1 billion for petroleum products’

subsidies, a 47% drop from the previous fiscal year. (Amcham, 2020)

3-Social factors
 Commitment toward safety
 Old generation resist the digitalization and automation process (Threats )
 Unavailability of strategic plan to include the informatics programs and applications in the
petrol sector (Threats )
 Increasing awareness and focus on more friendly fuels (Threats )
 Increasing oil and gas consumption due to the increasing in the number of consumer
(opportunities)
 Average level of education (Threats )
4- Technological factors
 Incorporating initiatives for electronic services open source applications (opportunities)
 Internet availability and usage (opportunities)
 E-commerce (opportunities)
 Presence of technological capabilities. (opportunities)

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  Infrastructure of network (opportunities)

5- Environmental factors
 Population fear from the Hazardous waste of petroleum product (Threats )

6- legal factors

 No stockholder commitment to take responsibilities in utilizing e-petroleum services

according to regulations (Threats )
 e-petroleum services could be part of e- government (opportunities)
 unavailability of laws e-petroleum services practice (Threats )
 No regulatory frame work for information security , privacy and safety (Threats )
 The Egyptian Mineral Resources Authority (EMRA) and the competent entity shall prepare
templates for the exploration licenses and all relevant forms (Threats if the application for
registration in the field take time and may lead to loss of many investment)

4-The internal environment Assessment

The main objective of the internal Environment Analysis is to define and understand the
strengths and weakness that have an impact on our organization and affect the organization
operation, resources allocation, and sustainability
4-a: internal management analysis
The top management of petrol sector integrated strategy in the petroleum, gas and mineral
resources domains (Strength), in which its primary targets are:
 Ensuring energy security
 Fulfilling local demand requirements
 Achieving value-added and optimal utilization of Egypt’s natural resources
 Raising human resources qualifications and efficiency
 Narrowing the gap between production and consumption throughout a five year plan
 Encouraging and attracting new investments in exploration and development domains

the top management supporting the digital transformation in all the sector's domains, by using
Enterprise Resource Planning (ERP) system in the sectors' companies to link them together,
to exchange information easily and facilitate all situation for decision makers. (Strength)
Ministry of petroleum has Data analysis system that allows continuous production, manage
exceptional events, on time data analysis, issuing reports to support decision-makers and
enhance HSE. (Strength)

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The sector management start a modernization project that aims to design and implement a
transformative program for Egypt's oil and gas sector. (Strength)
And they want to build a secure Decision Support System with reliable information through an
integrated Enterprise Resource Planning (ERP) automating dataflow across sector companies.
(Strength)
They succeeded in developing a secured alternative via VPN technology, to overcome any
technical barriers.
They developed sector’s intranet portal as a way to communications and collaboration
between the employees
During the last period from October 2013 until October 2019, 72 new agreements were signed
with several major international companies and 27 agreements were amended with total of
(99) agreements with a total investment of $ 15.728 billion and signature bonus of $ 1.195
billion, with 401 wells. Now we have 161 valid agreement divided into 123 agreement valid to
EGPC and 22 with EGAS and 16 with GANOPE. (petroleum, 2019) (Strength)
They Develop document as a local Emergency Response Plan in the event COVID – 19 is detected at any
oil and gas company in Egypt. (Strength)

Conclusion: petroleum sector in Egypt have strong top management, they understand the
importance of improvement toward the achievement of Egypt vision 2030 and the
importance of incorporation of the digital transformation in all activities of the sector.

4-b: internal financial analysis

Covid 19 pandemic lead to severe declining in oil prices, which began the year at around USD 63 per
barrel to May 2020 stood at USD 30.21. And demand for oil decreased due to the decrease in
business activity, closure of international and domestic travel and closure of factories so all this
points have highly effect on the resources of petroleum sector in Egypt. (Amcham, 2020)
According to Central Bank of Egypt data for first half of 2019/20, the petroleum sector
accounts for 12% of Egypt’s GDP (2030 target 25%), 37% of its exports and 17% of its imports.
It also accounts for 10% of total investments
The petrol sector established nine projects with investments of EGP 11.7 billion in first half of
2019/20, according to the Ministry of Planning and Economic Development. (Amcham, 2020)
(Strength)
The petrol trade balance in 2019/20 recorded a USD 733.3 million deficit, compared to USD
150.8 million surplus in 2018/19. Petroleum imports marginally decreased year on year by USD
79.7 million to USD 5.8 billion, while exports fell by 16% to USD 5 billion, despite an increase
in natural gas exports.

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(86) Development lease for new discoveries were signed in the Mediterranean, Western and
Eastern Desert, with total development bonuses of 33.2 million dollars. (petroleum, 2020)
(Strength)
27 projects were implement for developing gas fields, with investments of about $ 30 billion,
this led to increasing natural gas production to 7.2 billion cf/d. (petroleum, 2019)(Strength)
According to The Minister of Planning and Economic Development, Hala Al Said Sayed that 37
petroleum projects were implemented with total investment costs EGP 431.3 billion during the
last two years, 18 of projects were implemented during 2019/2020 worth EGP 96.7 billion.
Conclusion: petroleum sector in Egypt have strong financial situation, make the sector have
the ability to penetrate more in the market and establish more projects with incorporation of
digital transformation technology without fear from the high cost of the implementation of
this new informatics technology
4-C: internal Operation& production analysis
The agreements for oil and gas exploration are vital for the petrol sector. by these agreements,
oil and gas exploration is established through foreign, Arab and Egyptian companies, that inject
billions of $ as direct investments to extend and support oil and gas production that affect
the country's national product, also the rise in exploration and development and also the
consequent increase in production rates contribute to the reduce imports and reduce the cost
of production, that’s contributing to the financial set-up.so increase of the oil and gas
production with low cost will result in more improvement within the financial situation of oil
and gas sector and make them ready to develop strong digital informatics system to support
the data flow across sector companies. And overcome any technical barriers. (Strength)
 The intensive petroleum exploration programs within the past period, 239 discoveries (157 oil
- 82 gas) achieved which added Egypt's oil and gas reserves about 355 million barrels of oil and
condensates in addition to 36 TCF gas from 2013 until now. (petroleum, 2020)
86 Development lease for new discoveries were signed in the Mediterranean, Western and
Eastern Desert. (petroleum, 2020)
They conducted a Multi-Client Project in the Western
Mediterranean to define the geological structures of the
region and market them globally to foreign companies,
that inject billions Dollars as direct investments to
increase oil and gas production or at least maintain the
level of production (Strength)
Picture 5 Map of the New acquired 2D MC in the West Mediterranean

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4-D: internal Human resources analysis
They have:
 Over staffing ( Weakness )
 Succession plan to select sector top leaders (Strength)
 Middle Management Development programs (Strength)
 Clear career path (Strength)
 New payment Scheme (Strength)
 Performance Based Appraisal (Strength)
 Long term expertise in the petroleum sector. (Strength)

 Old generation of employees ( Weakness )

They do not have

 Good distribution for the employees inside the sector ( Weakness )

 Employees Awareness about HSE as one of the sector core values. ( Weakness )

5: Quadratic analysis
5-a: SWOT analysis
From external and internal analysis for the oil and gas sector in Egypt we able now to extract
the strengths, weaknesses, opportunities and threats.

 Strengths
From the analysis I found that the petroleum sector in Egypt is one of the strongest sectors and
has many of strengths in different aspect managerial, financial, and operational and manpower
skills and experience. So the strengths of this sectors are the following:
1- clear strategy in the petroleum, gas and mineral resources domains
2- strong and unique infrastructure
3- using Enterprise Resource Planning (ERP) system in the sectors' companies to link them
together
4- Data analysis system that allows continuous production, manage exceptional events, on
time data analysis, issuing reports to support decision-makers and enhance HSE.
5- Clear investment plans
6- Signing of 14 new agreements between March and October with major international
companies to expand the search for natural gas and petroleum in Egypt in a number of new
and promising areas despite of COVID 19 pandemic.

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7- modernization project that consist of the 7 programs (upstream investment attraction ,
sector structure reform, HR management, downstream performance, upstream
performance, hub strategy and decision support and data flow )
8- Long term expertise in the petroleum sector.
9- Develop document as a local Emergency Response Plan in the event COVID – 19 is detected
at any oil and gas company in Egypt.
10- Strong regulations and laws
 Weakness
1- Absence of good distribution of employees inside the sector
2- Over staffing
3- High import dependence
4- Old generation employees resist the digital transformation
5- Employees Awareness about HSE as one of the sector core values.
 Opportunities
1- Increasing oil and gas consumption due to the increasing consumer due to increase
population
2- Support of Egyptian government to the petroleum sector
3- Cooperation with international and regional companies
4- Availability of the programs specialized in establishing an integrated digital system on
large scale
5- The economic reform strategy adopted by the Egyptian government about 6 years ago
helped put the Egyptian economy on the right path
6- Incorporating many initiatives for electronic services open source applications
7- Internet availability and usage
8- Infrastructure of network
9- The Egyptian government proposed new sector structure for the petroleum
sector
 Threats
1- Geopolitical conflicts.
2- Global Economic crisis due to Covid 19 infection
3- The majority of the governments of the oil producing countries control more than 90% of
the oil reserves and over 75% of global oil and gas production.
4- The relationship between the value of US dollar and oil prices
5- threats come from neighboring countries: Ethiopia , Libya and turkey with the
probability of war
6- insufficient fund
7- Inflation rates
8- low income level
9- informatics system as(Enterprise Resource Planning ERP, Electronic Portal and
Industrial control system ICS ) are very expensive

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 10- High cost of training personnel on the informatics new technology
11- No stockholder commitment to take responsibilities in utilizing e-petroleum services
according to regulations
12- Unavailability of laws e-petroleum services practice
13- No regulatory frame work for information security , privacy and safety
14- Fear of losing certain jobs when e-petroleum services deployed

5-b: TOWS analysis

SO strategy (Maxi-Maxi" Strategy)
Strategies that use strengths to maximize opportunities

1- Meeting the high demands of the market for petroleum and petrochemical products,
mineral resources as well as achieving the target of the national economy growth rates
by using the clear investment plan, integrated strategy and strong infrastructure.
( S1,S2.S5,O1)
2- Highly skilled and experienced employees with some of training on the technology will
be able to use the Enterprise Resource Planning (ERP) system in the sectors' companies
to link them together and the Data analysis system that allows continuous production,
manage exceptional events, on time data analysis, issuing reports to support decision-
makers and enhance HSE and available programs specialized in establishing an
integrated digital system on large scale ( S3,S4,S8,O4,O5,O6,O7)

ST strategy (Maxi-Mini" Strategy)

Strategies that use strengths to minimize threats

1- Develop an attractive environment for foreign investment make them able to minimize
the threats of insufficient fund, inflation rate, low income level and the high cost of the
digital informatics technology facilities . (S1,S5,S6,S7,T2,T5,T6,T7,T8)
2- Long term expertise in the petroleum sector and high skilled employees make them able
to adapt rapidly to the digital informatics technology after short time of training with low
cost. (S8,T9)
3- Development of strong regulations and laws make them able to minimize the threats of
lack of stockholder commitment to take responsibilities in utilizing e-petroleum services
according to regulations, Unavailability of laws e-petroleum services practice and the
unavailability of regulatory frame work for information security, privacy and safety.
(S10,T11,T12,T13)
WO strategy (Mini-Maxi" Strategy)
Strategies that minimize weaknesses by taking advantages of opportunities

1- Incorporating many initiatives for electronic services open source applications,

Internet availability and Infrastructure of network encourage the old generation for rapid
adaptation with new digital transformation technology. (W5, O6, O7, O8)

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 2- Cooperation with international and regional companies make them able to minimize
their dependency on the imports (W3,O1,O3)
3- Develop a new sector structure for the petroleum sector overcome the bad distribution of
employees inside the sector and the Over staffing ( W1,W2,O9)

WT strategy (Mini-Mini" Strategy)

Strategies that minimize weaknesses and avoid threats

Overcome weaknesses by making them strength

1- Make good distribution of employees to avoid Fear of losing certain jobs when e-
petroleum services deployed ( W1,T14)
2- Decrease imports dependent to avoid the effect of insufficient fund and the Inflation
rates (W3,T6,T7)

5-c: Quantitative Strategic Planning Matrix (QSPM)

Factors Market penetration Market development
(more oil exploration in promising areas (Expand in oil exploration in Africa using digital
in Egypt using new digital information information system )
WT system )

Attractiveness Total attractiveness Attractiveness Total attractiveness

Strengths
clear strategy in the petroleum, gas and 0.1 5 0.5 3 0.3
mineral resources domains

strong and unique infrastructure 0.06 4 0.24 3 0.18

Enterprise Resource Planning (ERP) system 0.1 4 0.4 2 0.2

in the sectors' companies to link them
together
Data analysis system that allows continuous 0.1 4 0.4 2 0.2
production, manage exceptional events, on
time data analysis, issuing reports to
support decision-makers and enhance HSE.
Clear investment plans 0.1 5 0.5 4 0.4

Signing of 14 new agreements between 0.07 5 0.35 1 0.07

March and October with major
international companies to expand the
search for natural gas and petroleum in
Egypt despite of COVID 19 pandemic.
modernization project that consist of 7 0.1 5 0.5 1 0.1
programs
Long term expertise in the petroleum 0.05 4 0.2 3 0.15
sector.
Develop document as a local Emergency 0.04 2 0.08 1 0.04
Response Plan in the event COVID – 19 is
detected at any oil and gas company in
Egypt.
Strong regulations and laws 0.05 4 0.2 3 0.15
Weaknesses

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 Absence of good distribution of employees 0.05 2 0.1 1 0.05
inside the sector
Over staffing 0.03 2 0.06 1 0.03
High import dependence 0.04 4 0.16 4 0.16
Oil spill risk 0.06 4 0.24 4 0.24
Old generation employees resist the digital 0.05 4 0.2 1 0.05
transformation

Opportunities
Increasing oil and gas consumption due to the 0.08 4 0.32 4 0.32
increasing in the number of consumer
Support of Egyptian government to the 0.08 5 0.4 3 0.24
petroleum sector
Cooperation with international and regional 0.08 5 0.4 3 0.24
companies
Availability of the programs specialized in 0.06 4 0.24 2 0.12
establishing an integrated digital system on
large scale
The economic reform strategy adopted by 0.07 4 0.21 1 0.07
the Egyptian government about 6 years ago
helped put the Egyptian economy on the
right path
Incorporating many initiatives for electronic 0.05 3 0.15 1 0.05
services open source applications
Internet availability and usage 0.04 3 0.12 1 0.04
The Egyptian government proposed new 0.06 3 0.18 1 0.06
sector structure for the petroleum sector
Threats
Geopolitical conflicts. 0.08 5 0.4 5 0.4
Global Economic crisis due to Covid 19 0.07 5 0.35 5 0.35
infection
The majority of the governments of the oil 0.07 4 0.28 3 0.21
producing countries control more than 90% of
the oil reserves and over 75% of global oil and
gas production.
The relationship between the value of US dollar 0.06 4 0.24 4 0.24
and oil prices
threats come from neighboring countries: 0.05 3 0.15 3 0.15
Ethiopia , Libya and turkey with the
probability of war
insufficient fund 0.04 3 0.12 3 0.12
High price of informatics technology 0.04 2 0.08 1 0.04
No stockholder commitment to take 0.04 2 0.08 1 0.04
responsibilities in utilizing e-petroleum services
according to regulations
No regulatory frame work for information 0.03 2 0.06 1 0.03
security , privacy and safety

Total score 7.91 5.04

Comment on QSPM:
The score of alternatives strategies should be more then 3 to be included in the future plan of any
organization due to strategies are less than 3 means that the SFAS factors don’t support these
strategies in my QSPM analysis The score of market penetration and market development are both
above 3 but the highest score is for market penetration, so it will be the petroleum sector prioritized

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strategy, and based on the financial and human resources availability, the second strategy will be
considered.

6: The Most Important Strategies that can be used:

Based on my previous external and internal analysis for the petroleum sector in Egypt that
ended up by their financial, managerial and operational situation and after conducting of QSPM
matrix the best strategies should be used in the petroleum sector are:
6: a- Corporate level strategy

Intensive strategy (ANSOF)

1st: (Market penetration): More oil exploration in promising areas in Egypt using new digital
informatics system
By using of the digital transformation technology and incorporation of many information
system as Automation of the daily production reporting from production companies to EGPC.
This give a strong security by developing a secure dataflow between production systems in
companies and the centralized production database in EGPC. And the petroleum sector will
be able to sign more agreement with international corporate in safe and secured manner and
faster by using of the electronic agreement form. The incorporation of the intranet portal as a way
to communications between sector employees will Provide them by worthy source of information,
Enhance their loyalty to the sector, Promote employees innovation and excellence and become easy to
share experience in different functional areas, all of this make the petroleum sector able to develop
more and more penetration in the Egyptian market by more oil and gas exploration in
promising areas in Egypt.
In case of the financial and human resources availability, the second strategy will be
considered is
2nd: Market development: Expand in oil exploration in other countries in Africa using new
digital informatics system to Transforming Egypt into a Regional Hub for Oil & Gas Trading.
6 -b: Business level strategy

Cost leadership strategy

The petroleum sector able to use this strategy due to able to increase Asset utilization and
resource integration, achieve globally competitive cost performance and control the cost of
overhead ,cost of R&D and cost of the implementation of digital information so able to
decrease the price of some oil substitution product as natural gas based on and according to
the minister of petroleum and mineral resources: that stated Egypt succeeded in achieving the
best GDP rate since 11 years, of about 5.6%. And 27 projects were implement for developing
gas fields, with investments of about $ 30 billion, this led to increasing natural gas production
to 7.2 billion cf/d. And the Recently, several discoveries of natural gas have been achieved to
meet the demand of local market, such as Nooros discovery in Nile Delta, North Alex and West

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Nile Delta in Mediterranean sea and Zohr discovery which is considered the largest natural gas
discovery in Mediterranean sea and one of the largest natural gas discoveries worldwide.
(petroleum, 2020)

Figure 2 Gas production rates Figure 3 Gas production distribution to

Some sorts of digital information technology can be used in petroleum sector:

Platform: which uses data to permit employees to form applications and control manufacturing
processes remotely.
Smart sensors: provide a more holistic overview of business in real time and forestall
dangerous incidents.

Building Maintenance and Management: access real time information and connect with
maintenance workers on site to resolve issues quickly.

Task Management: Operators in industrial settings such like oil exploration field can control
activities in remote locations. They will also enable field personnel to attach with experts in
other locations.
What are the petroleum sectors need for achieving the previous strategies with the
incorporation of new information technology?
To implement the digital transformation and incorporate the new information technology in all
activities inside the sector, they will need to combine with IT vendor, and software projects
outsourcing that will be very efficient way. It saves time and money to build a team, but very
important to confirm that accompany, has engineers that can handle complicated issues. They
should know that the IT service provider should be a strategic partner. It requires to know how
to cooperate with a software outsourcing company. Cooperation with a software vendor
requires to be aware about process stages and mutual expectations.
IT outsourcing can go on the right way if petroleum sector:

1- Identify the departments which digitally underdeveloped

2- Establish clear and ambitious goals for everyone of employees to follow

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 3- Assign team responsible for the change process. able to communicate with a software
outsourcing company on both business and technical aspect
4- Establish a way to measure progress

The petroleum sector top management should start to develop a digital transformation
roadmap in collaboration with outsourcing digital transformation professionals companies to
analyze the requirements to ensure that transformation initiatives match sector’s core
objectives, mission and vision.

To develop this roadmap they should make an assessment of the current digital strategy of the
sector and divide the map to 4 element employees, process, technology and content
 Employees: involving everyone at the ministry in improving processes through cross-
functional collaboration.
 Process: all about increase the sector efficiency and ensure that the new digital work is
modifiable.
 Technology: develop an integrated information infrastructure to link them together, to
exchange information easily and facilitate all situation for decision makers.
 Content : final element of roadmap to make sure that essential information is easy to
find, personalized and look at all digital assets to check whether information is
organized or not.
For developing a successful digital transformation strategy in the petroleum sector they
should follow this 7 steps:
1-Define the business value of digital transformation
2-Prepare for culture change by put the employees in the heart of digital transformation
3-Start the digitalization with measurable initiatives
4-Develop roadmap for the transformation that matched to long term strategy
5-Join with partners and expertise to do it valuable and faster (outsourcing)
6-Be flexible, learn from expertise and adjust
7- Find new ways to improve connection between people, product and process
Human resources department of the petroleum sector
should Launch new trainings introduced by outsourcing
digital transformation professionals companies for
employees for what is the importance of applying digital
transformation system and Holding seminars and

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training for top management and employees to train them How to use digital transformation
system.

Picture 6 digital transformation strategy

SOURCE https://www.ptc.com/en/blogs/corporate/digital-transformation-strategy#scale_transform

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 7: Strategic objectives of petroleum sector in Egypt
This strategic objective for the upcoming 3 years (2021-2022-2023)
 By the end of 2022, 60% of petroleum sector will operate fully by digital platforms as (data
analysis and issuing reports to support decision-makers and enhance HSE).
 Advancing a national high efficiency employees by 90% to adapted with new technology by the
end of 2023
 Increase the work environment safety by 90% by usage of new informatics technology by the
end of 2022
 Increase the market share 30% by the end of 2023 to Meet the demands of the market for
petroleum products and saving money for procurement of advanced information systems
 Increase the number of companies in the sector that inked together by information system by
90% by the end of 2023.
 Increase Egypt ranking in oil production by 3 positions by the end of 2023 after the incorporation
of new technology in all activities (Egypt now ranking 27th in the world) (worldmeter, 2020)
 Improve the satisfaction of the citizens which contributes to improving the performance of
government agencies and ensuring the highest quality of services 85% by end of 2021.

8: Policies and procedures

Managerial, Operational and technological policies
1- Equipment maintenance policy: To organize the regular maintenance of new
informatics system.
2- International agreement policy: To organize all points during any collaboration
between the petroleum sector and any other international organization.
3- Digital transformation policy: To clarify the process of transformation from
manual to digital work.
4- Data flow and management policy: To manage the flow of data between the
companies of sector through ERP system.
5- Data safety and security policy: To ensure the safety and security of data.
6- Monitoring risk policy: To monitor risk during transforming the sector activities
from manual to digital work.
7- Costing and pricing policy: to include the cost of new information technology to
the cost of services.
8- Investment policy: To manage all steps of investment.
9- Outsourcing policy : to set all steps of collaboration with digital information
vendor

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Human resources policies
1- Employees Training policy: To organize the training of the employees on the new
information technology.
2- Hiring policy: To hire the well competent employees able to deal with the new
information technology.
3- Employees’ distribution and rotation policy: To organize the distribution of
employees to overcome the overstaffing.
Marketing policies
1- Awareness campaign policy: To market the services and the new advanced
technologies used by the sector. And To organize the Awareness campaign (dates,
places and the target attendees)
Quality policies
1- Auditing policy: To set the process of regular audit and ensure the all activities meet the
standard.
2- KPIs policy: To measure the performance of employees toward the achievement of the strategic
objectives of the petroleum sector after the implementation of digital transformation.

9: The Control and Evaluation Mechanisms

Implementation Matrix (action plan Matrix)
To achieve the strategic objectives of the petroleum sector we need to match the functional objectives
of all department of this sector together and put it in one implementation Matrix to ensure that we are
on the right way for the achievement of the strategic objectives.

So I need to ask some questions in order to evaluate the applying of digital transformation in all
petroleum sector for both quantitative and qualitative methods, and those questions are : -
Quantitative Indicators

1- What is the percentage of using digital transformation in the activities in all sector department?
2- What is the number of employees in sector that are using the digital transformation
mechanism and adapted to it?
3- What is the number of training program that are launched?
4- What is the ranking of the Egyptian petroleum sector in oil and gas exploration projects with the
incorporation of new technology in all activities?
Qualitative Indicators

1- How fast are changes occurring within the petroleum sector after implementation of digital
transformation?
2- Have the barriers between departments been removed after digital transformation?

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 3- How the digital strategy is integrated with the general strategy? What are the results of Surveys
and questionnaires at the end of each project for assessment of the implementation of
digitalization?
Implementation matrix

Functional Objective Target Action KPIs Time

area of
audit
Financial Allocate required Increase budget by Redistribution of budget across Amount of money end
budget for the 60% the petroleum sector activities allocated for new 2023
incorporation of To allocate sufficient fund for technology system
new technology incorporation of information and the% of increase
system technology in budget
Increase the annual Annual Profit of 100 calculate the expenses and Achievement of the By end
profit billion USD income to know the profit targeted profit 2021

increase revenues revenues USD 125 Calculate revenues from the Achievement of the By end
from projects for million from projects for gas processing targeted revenues 2022
gas processing projects for gas
processing
Operational -Increase new 85% of petroleum -Using Enterprise Resource The percentage of By the
and technology system sector operate fully Planning (ERP) system in the using digital end of
managerial utilization and by digital platforms sectors' companies to link transformation in 2023
Development of them together and the activities in the
technological sector and between
infrastructure -Using Data analysis system the companies of the
Link 90% of the
that allows continuous sector
companies of the
-Enhancing the production, manage
sector together
decision making exceptional events, on time
process & data analysis, issuing reports to
integrate support decision-makers and
enhance HSE.
information
technology
-Launching the sector
intranet as an official portal
to connect the sector
employees under one
unified platform.

-Build Decision Support System

(DSS)

improve the Improve the Applying Linear Programming The percentage of By end
efficiency of efficiency of technology to Improve the improvement in the of 2022
production planning production planning efficiency of production efficiency of the
models models by 80% planning models production planning

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 model

Increase production Increase production Utilization of EPC Platform as The percentage of end of
capacity. capacity 60% new informatics technology increase in the 2022
that help to increase production capacity
production capacity

Reduce delay in Reduce the delay of transferring the excess Assess time of delay End
static equipment equipment delivery capacities to other qualified of the equipment 2021
delivery in sector through Increase workshops inside the delivery in sector
projects integration among petroleum sector projects.
petroleum sector
workshops by 80% good distribution of employees Amount of
inside the petroleum sector transferring
capacities from
workshops to other
qualified workshops
Decrease the Decrease the Convert all paperwork to The Percentage of End
operational costs by operational costs by computerized and electronic decrease in paper 2022
decreasing paper decreasing paper form work of
working for all working for all administrative area
administrative administrative
departments departments 80%
HR -Generate a dynamic Advancing a national -Launching new trainings will -Percentage of At the
pool of young high efficiency be introduced by digital employees in sector end of
professionals with transformation professionals that are adapted
employees by 90% each
equal opportunity for employees for what is the with the usage of
and competitive to adapted with new importance of applying digital new the digital year
chance to lead the informatics transformation mechanism transformation 2021
future growth. technology - Holding seminars and training system after 2022
for top management and receiving the training 2023
-Introduce employees to train them how programs
Establish from 3 to 5
comprehensive to use digital transformation
training mechanisms
talent management
system for programs/year -Number of training
employees -Holding Special activities and program established
Programmer for talented for employees/ year.
-Maximize the employees that they are
potential of existing willing to travel abroad to get
staff. more advanced training on the
newest technology
Establish training
programs on new -Highlight HSE as one of the
information sector core values through
technology system awareness sessions and
capacity building.

-Review of the employees' job

description, job specification
and job performance standard

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 to match the change of the
organization.

-Designing a good recruitment

process (Selection, interviews)
with a high level of orientation to
ensure the compatibility of the
new recruited employees with the
existing technology culture to
achieve organizational objectives.

Quality Decrease the defect Decrease any defect Regular audit for the The percentage of End of
assurance in the digitalized in the digitalized digitalized process the defect if the 2022
process. digitalization process
process by 80%

Marketing Increase -Increase setting marketing Number of Yearly

awareness of awareness of campaigns using social awareness 2021
between customer media and YouTube campaign/year
digital 2022
about the benefit transformation to 2023
from the usage of 30%
digital
transformation to
-Setting 3-5
awareness
campaign

11: Conclusion
The Ministry of petroleum and mineral resources after the implementation of this strategic plan
through invest more in the Egyptian market through more oil and gas exploration in promising areas
in Egypt and decrease the price of natural gas to attract more costumer, will gain more revenues and
fund to compensate the shortage of fund due to The Ministry of Finance has cut by half its forecasted
expenditure on fuel subsidies In financial year 2020/21 and the ministry become able to implement a
programs specialized in establishing an integrated digital system to contribute to supporting decision-
making, linking information and helping in facing crises by establishing a unified system for managing
the resources and assets of the petroleum sector based on collecting and analyzing data and
developing information systems , taking into account integration with systems Industrial control
based various activities of the oil and gas industry. And after all the previous points the ministry will
be able to achieve the strategic goals of the petroleum and gas sector in accordance with the Egypt
Vision 2030 and the sustainable development goals.

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12: Future dream for petroleum sector in Egypt

Picture 6: digital in midstream

Picture 7: digitizing the future oil field source: https://www.pwc.com/us/en/industries/assets/pwc-eu-m-

web-graphics-midtream-digital.pdf

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13: Refrences

1. https://www.petroleum.gov.eg
2. https://www.undp.org/content/undp/en/home/sustainable-development-
goals.html
3. https://egyptoil-gas.com/
4. https://www.eia.gov/emeu/cabs/Egypt/pdf.pdf
5. https://www.eprom.com.eg/
6. https://www.amcham.org.eg/information-resources/covid-19-response/
impacts-of-covid-19-pandemic-on-egypts-petroleum-sector
7. https://www.communicationsquare.com/news/what-is-digital-
transformation/
8. https://www.pwc.com/us/en/industries/energy/digital-in-energy.html
9. https://www.worldometers.
10.https://www.visualcapitalist.com/connected-workers-digital-
transformation-future/

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