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Egypt asks Arab allies to finance 2014 fuel imports

Petroleum ministry mulls options for solving domestic fuel crisis, including deal with Cyprus and encouraging exploration by foreign companies

Ahram Online, Sunday 24 Nov 2013
sherif ismael
Sherif Ismail Egypt's Ministry of Petroleum (Photo: Al-Ahram)
Views: 1809
Views: 1809

Egypt has asked the Arab Gulf states of Saudi Arabia, Kuwait and the United Arab Emirates to finance its coming-year fuel imports, reported the Saudi newspaper Al-Riyadh on Sunday, citing Egypt's petroleum minister.

Over the last month, Egypt has been hit with a fresh butane crisis, with long queues outside cooking gas depots due to a shortage in cylinders.

According to petroleum minister Sherif Ismail, Egypt's government has prepared for the possibility that the Gulf countries will not provide more funding, in which case the state will have to rely on its own coffers to pay for the year's petroleum imports.

Ismail expects the last fuel shipment covered by the three oil-rich Arab states to arrive by the end of December. The total Gulf petroleum package – bestowed upon Egypt following the ouster of Islamist president Mohamed Morsi – was worth some $4 billion.

He added that Egypt is currently negotiating with Cyprus to import natural gas in order to meet domestic demand.

The ministry has also mulled raising prices for the gas it buys from foreign oil companies in Egypt so as to encourage more local exploration.

Egypt currently buys natural gas from its foreign partners at $2.65 per British Thermal Unit. The new price has not been set.

In September, Egypt agreed to a scheduled repayment of $6 billion in outstanding debt to foreign oil companies.

Financial disclosures by firms including BP PLC, BG Group, Apache, Edison SpA and TransGlobe Energy show that Egypt owed more than $5.2 billion to foreign oil companies at the end of 2012.

Dana Gas, which is owed $230 million in overdue payments for gas supplies, said it was in active dialogue with the government over the debts. 

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