Egypt emerging from the doldrums - FREE PRESS JOURNAL

Feb 25, 2017 09:36 am

Sunanda K Datta-Ray

WITH about 28 per cent of the population languishing below a low poverty line, the best news lately was that foreign exchange reserves rose by $2.1 billion in January to touch $26.4 billion against December’s $24.2 billion. More intensive and efficient exploration of oil can make all the difference to a country that was seen at one time as a leader of the Afro-Asian world but has taken a back seat in recent years mainly because of domestic political problems.

Almost as if to repudiate this column’s somewhat gloomy comments about Egypt last week, the country is now celebrating what is billed as the first ever Egypt Petroleum Show. It is the largest oil and gas industry event to take place in North Africa, with over 40 British companies participating. Oil, we are told, might yet overcome all disadvantages and help to revive Egypt’s economy and restore its traditional leadership role.

Egypt Pays Eni $650 Million Under Zohr Development Deal - HART ENERGY / REUTERS

Tuesday, February 7, 2017 - 2:09pm

Egypt paid its $630 million financial obligation in January to Italy's Eni to develop the biggest gas fields ever found in the Mediterranean, Rami Aboul Naga, assistant sub-governor for foreign reserves at the Central Bank of Egypt, told state news agency MENA on Feb. 7.

Petroleum Minister Tarek El Molla said in January Egypt was committed to repaying the $3.5 billion it owes in arrears to foreign oil companies, but a foreign currency shortage has made drawing down those debts more difficult.

Egypt's foreign reserves rose to $26.363 billion at the end of January, but were still about $10 billion less than the reserves before an uprising in 2011 ushered in a period of political turmoil, scaring away tourists and foreign investors, key sources of hard currency.

Without Saudi oil aid, Egypt rushes out big buy tenders - REUTERS

Fri Oct 7, 2016 | 10:47am EDT
Reporting by Eric Knecht and Abdel Rahman Adel in Cairo, and Jessica Jaganathan; Additional reporting by Rania El Gamal in Dubai and Ron Bousso and Libby George in London, editing by William Hardy)

CAIRO/SINGAPORE Oct 7 Egypt has not received October allocations of petroleum aid from Saudi Arabia, traders told Reuters, forcing its state oil buyer to rapidly increase tenders even amid a severe dollar shortage and growing arrears to oil producers.

Saudi Arabia agreed to provide Egypt with 700,000 tonnes of refined oil products per month for five years under a $23 billion deal between Saudi Aramco and the Egyptian General Petroleum Corporation (EGPC) signed during a state visit this year by Saudi Arabia's King Salman.

Egypt’s Natural Gas Crisis | Carnegie Endowment for International Peace

BY BRENDAN MEIGHAN 

Egypt’s temporary relief from its ongoing gas crisis is the result of a lull in demand, not an improvement in industry outlook. Thursday, January 21, 2016

One of the most pressing crises facing the Egyptian economy has been the severe shortage of natural gas. The crisis itself—which involves supply cuts to factories and frequent electrical outages—has received copious coverage in the domestic and international press and has tested the patience of the Egyptian people and the business community. However, during the first week of November, officials at the Egyptian Natural Gas Holding Company (EGAS) announced that Egyptian heavy industry was now being supplied with all of its needed natural gas and other fuels. Officials from a number of companies and trade organizations confirmed this on December 2. There has also been an absence of reports of power cuts in major residential areas. Unfortunately for Egypt, this may simply be the result of a lull in demand due to moderate weather and slower production from heavy industry, not a permanent end to the shortages.

Egypt arrears owed to oil firms rises to $3 billion at end-2015 | Reuters

Tarek El Molla, Egypt's Petroleum Minister

Sun Jan 3, 2016 - Egypt's outstanding arrears to foreign oil companies rose to $3 billion at the end of December 2015 from $2.7 billion at the end of October, Petroleum Minister Tarek El Molla told Reuters on Sunday.

The ministry had said in September that Egypt aimed to reduce the arrears owed to foreign oil companies to $2.5 billion by the end of 2015 and to pay them off completely by the end of 2016.

Delays in paying back foreign petroleum companies had discouraged investment in the sector, but a drive to increase the price paid for domestic production and pay back arrears had encouraged new contracts signed in 2015.

El Molla did not provide further detail on why total arrears have risen since November.

Egypt has run short of hard currency since a 2011 uprising drove tourists and investors away. Reserves almost halved to $16.4 billion by the end of November.

Once an energy exporter, Egypt has turned into a net importer because of declining oil and gas production and increasing consumption. It is trying to speed up production at recent discoveries to fill its energy gap as soon as possible.

(Reporting by Abdel Rahman Adel; Writing by Eric Knecht, editing by William Hardy)

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Egypt struggles to pay for oil, LNG supply amid foreign currency crisis | Reuters

LONDON/MILAN | By Sarah McFarlane and Libby George

Dec 23 - Egypt is struggling to pay for U.S. dollar-priced oil product and liquefied natural gas (LNG) imports, cancelling purchases, and asking suppliers to extend payment terms amid an acute foreign currency crisis, industry sources said.

Egypt, which depends on oil and gas imports, has faced a sharper decline in foreign currency receipts after a plane carrying Russian tourists crashed in October while low oil prices limit aid from Gulf allies, banking and trade sources said.

The sources said that Egypt has asked oil and LNG suppliers to extend payment terms to 90 days after delivery earlier this month due to its foreign currency crisis.


Egypt is struggling to pay for U.S. dollar-priced oil product and liquefied natural gas (LNG) imports, cancelling purchases, and asking suppliers to extend payment terms amid an acute foreign currency crisis, industry sources said.

Egypt, which depends on oil and gas imports, has faced a sharper decline in foreign currency receipts since the Russian airliner disaster in October, which has hit tourism, while low oil prices limit aid from Gulf allies, banking and trade sources said.

The sources said that Egypt has asked oil and LNG suppliers to extend payment terms to 90 days after delivery earlier this month due to the currency crisis.

According to existing arrangements, Egypt is obliged to pay for LNG imports 15 days after a cargo unloads.

"The combination of the weaker tourism sector, along with low oil prices tightening the budgets of GCC countries who have traditionally helped Egypt pay for commodities, is hitting foreign currency reserves," a banking source said.

"These elements and the Central Bank's wish not to close the year while depleting the levels of reserves triggered the request (to extend payment terms)," he said.

Short of dollars, Egypt has also cancelled the purchases of six gasoil cargoes initially scheduled for early January, oil market sources said.

"Those who can handle it will consider the extended payment," one oil trader said.

Payment delays have created a logjam of cargoes outside Egyptian ports, including at least six clean and three dirty product cargoes.

A source familiar with the matter estimated that Egypt is late in paying around $350 million to LNG suppliers.

"There's a possibility that some suppliers will not be accommodating and will walk away," he said, although LNG suppliers surveyed by Reuters denied they had any such intention.

Egypt imports around six to eight cargoes of LNG per month, valued at around $20 million to $25 million per cargo.

Its suppliers include BP, Shell, Gas Natural, Trafigura, Vitol, EDF Trading, PetroChina and Noble.

Egypt has emerged as a major new market for LNG as the government looks to ease the worst energy crunch in decades.

Falling output and rising demand have transformed the country from an oil and gas exporter to net importer.


Meanwhile on Wednesday Egypt's General Authority for Supply Commodities said it had changed the terms of payment for wheat purchased in its tenders.

(Additional reporting by Oleg Vukmanovic in Milan, Dmitry Zhdannikov in London and Lin Noueihed and Eric Knecht in Cairo.; Writing by Oleg Vukmanovic; Editing by Jane Merriman, Greg Mahlich)

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