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Wednesday, 15 February 2017

Global oil majors dish out love for Egypt

Global oil majors dish out love for Egypt: The oil and gas industry has given us two of the best headlines to come out of Egypt in recent weeks: “Eni, BP Pouring More Investment Into Egypt Than Anywhere Else” (Bloomberg) and “Oil companies bullish on Egypt, eyeing more investment, discoveries” (Reuters). The occasion was the first day of the 2017 Egypt Petroleum Show (or EGYPS, as it’s billing itself), which President Abdel Fattah El Sisi opened on Tuesday, AMAY reports.

The Zohr gas field was naturally the buzzword of the day, with reports saying that the government has been pushing oil companies to expedite their work so production can begin by September 2017, Schlumberger Director Ayman Shabrawy said. Eni’s CEO Claudio Descalzi confirmed that work was on track and said his company plans to inject a further USD 10 bn in Egypt over the coming five years, Bloomberg notes. Italy’s Edison, which inked a USD 86 mn oil and gas exploration agreement with the government in January, also has expansion plans in Egypt, Reuters says, and intends to bring the third phase of the Abu Qir gas field online in 2Q17, pumping an additional 100 mcf/d into the national grid, an unnamed company official tells Al Borsa. BP, which has acquired a 10% stake in Zohr, will be investing “more money in Egypt than any country in the world” in 2016-17, CEO Bub Dudley said, adding that “we have confidence in the government.”

Sultan Al Jaber was back in Cairo praising the Ismail government’s reforms and “wise policies to encourage global investments in the sector, Ahram Gate says. (Readers will remember Al Jaber as head of Abu Dhabi’s ADNOC as well as minister of state in the Emirates. In the latter capacity, he was effectively the UAE’s “minister responsible for Egypt” in the run-up to the March 2015 EEDC.)

Oil Minister Tarek El Molla reassured investors that Egypt was committed to repaying arrears to international energy companies and is preparing a schedule that will be announced soon. Egypt had racked up some USD 3.6 bn in debts during its 2014 energy crisis and the government is reportedly gearing up to repay USD 500 mn-1 bn to IOCs including BP and Shell following “repeated recommendations” from Ittihadiya, Al Mal says. Egypt will be importing additional oil and gas requirements from neighboring countries including Kuwait and Iraq and is close to finalizing an agreement with Iraq to import 1 mn barrels of crude a month, according to Reuters.

Who didn’t make an impact at the conference? Saudi Arabia. Shocking, we know.

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