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Monday, 17 January 2022

EGP 30 bn to be pumped into ​​state-owned oil companies next fiscal year

EGP 30 bn has been earmarked to develop state-owned oil companies in the FY2022-2023 budget, Oil Minister Tarek El Molla said, according to a ministry statement, adding that the figure is the highest ever allocated. To our knowledge, the ministry has not disclosed total spending on state-owned oil companies in previous years.

Could some of that go to greening the industry? Bringing the industry in line with environmental standards is of the utmost importance, El Molla said. We’re expecting some big announcements on green hydrogen and carbon capture projects ahead of COP27 in November: The government is soon to enlist a foreign consultancy to put together a 12-month strategy to develop the green hydrogen industry, while the Oil Ministry and Eni will announce joint initiatives on carbon capture at the global climate summit in Sharm El Sheikh.

The budget comes on the heels of major exploration + production agreements: At the start of the year, seven international energy companies were awarded eight of the 24 oil and gas exploration blocks included in the government’s latest bid round held. Meanwhile, Eni last month committed to invest a minimum USD 1 bn on exploration and extraction in the Gulf of Suez and Nile Delta regions, while the Oil Ministry also inked a new USD 3.5 bn, 20-year production agreement with Apache-Sinopec JV.

Next steps for the state budget: The Finance Ministry plans to begin public consultations on the FY2022-2023 budget and the government’s strategic targets this month, ahead of shipping the draft bill to the House of Representatives for discussion and approval.

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