Back to the complete issue
Sunday, 10 June 2018

Finance Ministry receives seven international offers for fuel hedging

EXCLUSIVE- The Finance Ministry is reviewing seven offers of hedging services from international banks and institutions, government sources told Enterprise yesterday. They refused to disclose the name of the bidders, preferring to wait until a Finance Ministry committee was finished going through the offers, which is expected to happen in two months’ time. They did tell us, however, that the contracts would likely cover a three-year period, adding that one of the banks offered to cover the difference in case global oil prices rise above USD 70/bbl. The sources also implied that the government may select more than one provider, adding that the choice will be determined based on the best average cut-off price and repayment terms offered.

Background: We had suggested on Thursday that the government might be in the market for a hedge after ministers agreed last week that the finance and oil ministries should begin talks with international banks to adopt unspecified “measures” to counter the rise in global oil prices seeing as next year’s budget predicts an average price of USD 67/bbl. Brent broke the USD 80/bbl mark last month before retreating to just under USD 76 last week.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; and Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt.