Egypt's Minister of Petroleum Tarek El-Molla told MPs Sunday that the country’s deal with the Saudi oil company Aramco is still in effect, insisting that its decision to suspend oil supplies to Egypt in October has no “political dimensions.”
In a Sunday meeting with parliament's Energy and Environment Committee, El-Molla revealed that the five-year deal with Aramco “has not been officially revoked by the company.”
“Aramco has not informed us in any official way that it will halt its oil supplies to Egypt,” said El-Molla, adding that “as a result, we consider our deal with Aramco to still be in effect.”
Earlier this month, Egypt's oil ministry announced that Aramco said it would be unable to send the agreed upon quantities of refined oil products to Egypt this October.
Egypt's deal with Aramco, which was reached during Saudi King Salman’s visit to Cairo last April, provides Egypt with 700,000 tonnes of oil products each month for five years against $23 billion.
“[The company] may have faced some problems that made it difficult to deliver its monthly oil supply to Egypt in October,” said El-Molla, adding that the deal, which began in May 2016, “helps Egypt get these products under very easy financial terms.”
El-Molla also said that Egypt has signed contracts with a number of companies since August 2014 in order to meet its solar and gasoline needs.
“The three Arab Gulf countries – Saudi Arabia, Kuwait and the United Arab Emirates – which have supported us since the 30 June revolution [of 2013], have been supplying us with all the oil products we need,” said El-Molla, indicating that “the value of imports of oil products from these three countries has reached $9 billion from 30 June 2013 to 30 August 2014.”
According to El-Molla, Egypt has no problem with Aramco, though “even if Aramco decides to no longer supply us with our oil needs, we would be able overcome this very easily.”
“Once we were officially informed by Aramco that it would suspend oil supplies in October, we were able to move quickly and meet all our oil needs from other sources in 48 hours.”
He said Aramco's sudden suspension of oil products to Egypt in October should renew the debate on the necessity of rationing the consumption of oil products.
“We should ration the use of subsidised products and encourage more investments in the oil sector so as to meet our oil needs in an independent way,” said El-Molla.