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Egypt to finalise 20 more oil and gas concessions by year end: Minister 20 more deals in the works, says Egypt's finance minister, as the country aims to tackle growing energy crisis
Egypt plans to finalise 20 oil and gas exploration concessions and modifications by the end of the year as part of its plan to reform the petroleum sector and solve its energy crisis, the minister of petroleum, Sherif Ismail, said in a panel attended by a US business mission in Cairo on Tuesday. "We already signed 36 new concession agreements and modifications. We have 20 more in the pipeline. They are at the state council right now. Once we receive them we will be presenting them to the cabinet to sign before the end of this year," said Ismail. Following the 2011 uprising that toppled president Hosni Mubarak, Egypt has been unable to pay its mounting debts to oil and gas companies. As a result, "there have been no new concessions in the period from 2010 to 2013, which resulted in decreasing exploration areas to only 27 blocks during 2013, down from 53 in 2010," he said. Total debt to foreign oil companies stood at $4.9 billion in October. Ismail said at the time that $2-$3 billion of the debt would be paid before the end of the calendar year. Payments of arrears are encouraging more investments in exploration, with an estimated $23 billion in new investments, $12 billion of which are on going while $10 billion worth are planned, Ismail told the panel. The country has also been suffering from a mounting energy crisis as domestic production of natural gas, predominantly used in power stations, has failed to keep up with rising consumption. Egypt will begin importing gas in the first quarter of 2015, around March, said Ismail. Earlier this month the country signed a deal with Norwegian Hoegh LNG for a floating storage and regasification unit (FSRU) which will allow Egypt to import LNG. According to Ismail, the sector's reform will involve working on the demand side in addition to the supply side. He said that the country's growing fuel subsidy bill had diverted resources from expansion projects. In July the government cut down fuel subsidies, which amounted to LE126 billion in the fiscal year 2013/14, by up to 78 percent. The petroleum sector strategy aims to contribute 5 percent to the country's GDP in 10 years, said Ismail. Egypt's economy grew a mere 2.2 percent in the fiscal year ending 30 June 2014, but the government has set a target of 6 percent growth rate in FY 2018/19. http://english.ahram.org.eg/News/115270.aspx
