UK's PM vows to keep tax cutting plan    China's central bank alerts against yuan speculation    Egyptian gecko invades Israel    Gold prices in Egypt on September 29    Egypt welcomes back Russian flights on 1st October    Egypt launches 200 Years of Continuing Science tourism campaign    Egypt, UAE partner on sustainable waste management in Sharm el-Sheikh ahead of COP27    Saudi King appoints Crown Prince Mohammed bin Salman as Prime Minister    QNB Group names TikToker Khaby Lame official FIFA World Cup Qatar 2022 brand ambassador    Egypt receives second monkeypox case    Egypt ready to build up international centre for storage, supply and trade grains – minister    Three possible scenarios as Egypt's central bank governor resigns – MP    Adele is living a love story, wants to be a homemaker    In Photos: Egypt swears in 13 new ministers after major Cabinet reshuffle    Egypt's Sisi names 13 ministers in Cabinet reshuffle    Spain: prosecutor seeks 8 years sentence for Shakira over tax evasion    Egypt: Alamein Art Festival kicks off a collection of recycled installations    Egypt's athlete Basma Emad wins bronze in weightlifting in Mediterranean Games    Maha karara joins AAIB as Head of Corporate Communications, Sustainability    Egypt works on charting cooperation strategies with international institutions for 5 years: Al-Mashat    Over 2.4 million newborns examined for hearing impairment: Health Ministry    Netflix releases trailer of Arab adaption of 'Perfect Strangers' film    Balqees to headline concert celebrating launch of streaming giant LIVENow in MENA    Sawsan Badr to be honoured at Aswan Women Film Festival    MP Abdel Hady Al-Qasby calls government to facilitate and support NGOs    Al-Sisi follows up on 'Great Transfiguration Project' in St. Catherine    Cairo, London stress need to strengthen cooperation to face climate change    Foreigners account for 22.6% of Egypt's T-bills issuances in 1H 2021: CBE    Egypt's ambassador to Italy passes away    Egypt confirms readiness to help African countries face terrorism and extremism    An estimated 235 million people needed humanitarian assistance and protection in 2021, an increase of 40% compared to 2020: IOM Egypt    Egypt, DRC discuss water cooperation during WYF    Egypt, DR Congo discuss boosting bilateral cooperation during WYF    Cameroonian police probe assault on three Algerian journalists covering AFCON    Pharaohs start AFCON 2021 campaign with fierce clash against Nigeria    Foreign Ministry opens capacity building course for French-speaking African diplomats    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Government pays 40% of foreigners' dues
Published in Daily News Egypt on 14 - 03 - 2015

The government paid $2.1bn of its dues to foreign companies, which are estimated at $5.2bn up until last September. The step came to encourage companies to invest and increase oil and gas production rates. Unfortunately, the decrease of Brent prices pushed partners to think about reducing their investments plan in Egypt.
According to a prominent foreign oil company official, the actual foreign company investments through the fiscal year (FY) 2013/2014 reached $6.9bn. It is expected that in FY 2015/2016, foreign investments in the oil sector will decrease due to the decrease of Brent prices to reach the average of $60 per barrel.
4bn$ Foreigner Companies Dues at the end of 2014

A Ministry of Petroleum official said the amount of foreign partners' dues that the Egyptian government had to pay reached almost $4bn at the end of 2014. This came after the ministry paid 40% of the total dues, which had been accumulating since 2008.
The ministry received a loan of almost $2bn to help pay financial dues to international gas and petroleum companies, which will be guaranteed by future crude oil shipment sales for five years.
The loan is considered part of the government's commitment to pay 60% of the total dues by the end of FY 2014/2015.
According to Executive Director of the Egyptian General Petroleum Corporation (EGPC) Tarek El Molla, the rate of dues of foreign partners increased to $300m annually. The crude gas and oil share of the foreign partner that EGPC receives is almost $1bn monthly. Only crude oil from Ras Ghareb is exported because of its heaviness and Egypt's inability to refine it.
The EGPC is responsible for paying foreign partners' dues according to the schedule to be agreed upon. The company has already started paying dues, but the issue's essential solution is to increase the country's oil and natural gas production.
Old Petroleum Agreements Will Not Obliges Foreigners to Implement Development Planes on Time

Foreign partners postponed linking various new wells to production, waiting for the Egyptian government to re-price gas. They highlighted that the cost of drilling decreased to 50%, as a result of the fall in current drill renting prices.
Abo Bakr Ibrahim, Chairman of Ganoub El-Wadi Petroleum Holding Company (Ganope), said oil agreements did not include an item obliging the foreign partner to implement the agreed-upon development plans on time. This led to reducing the company's natural gas production through the past years.
Amending items in the new oil agreements obliges the foreign partner to implement natural gas and oil production plans in the privileged area on the time agreed upon with Ministry of Petroleum and Mineral Resources.
A new term was added to the oil agreements obliging the partner to commit to the development plan on time, stated Ganope's chairman.
Another item states that the partner's privileged zone will be taken away in case the start-up date of the initial production is postponed.
Amendments on the agreements also included that the working time of the partner in the privileged zone should not exceed 30 years.
The agreement states that the partner's right of privilege will be 20 years, renewed up to five years after government approval. Renewal will be in case of a discovery in the crude oil the partner is producing.
All previously signed agreements did not oblige the partner to commit to the development plan, unlike British Petroleum's (BP) agreement in the North Alexandria concession area. This item was only added to the agreement's latest amendment, according to an official at the Ministry of Petroleum.
Foreign partners depend on gas price increase by Parliament to increase production

Foreign companies working in Egypt postponed the implementation of their development plans in several fields in response to the Egyptian government's delay in paying their dues. The Ministry of Petroleum, on the other hand, could not oblige them to execute their plan, as a result of the absence of any item on the agreement regarding this matter.
The total number of postponed projects by foreign companies working in Egypt produce roughly 1bn cubic feet of daily gas. This was a step to push the government to increase gas price. The most important project is British Gas' (BG) Phase 9B project, which has a total gas capacity of 500m cubic feet. The project was postponed to FY 2016/2017.
Egypt's gas production decreases by minimum 1.2bn cubic feet on an annual basis, and most oil companies in Egypt link their wells in order to make up for the loss.
Foreign companies working in the oil sector in Egypt relied on an increase in oil prices and receiving their dues from the government to increase oil investments in their fields.
The government's only choice is to increase oil prices and pay foreign partners all their dues for companies to raise their investments in the sector. This would lead to an increase in oil and gas production, according to an official at a foreign company.
Many oil companies agreed with the Ministry of Petroleum on new natural gas prices to be produced soon from fields. However, parliament has yet to approve these prices, so companies will not increase production until a board is formed and prices are set.
Companies negotiated with the government and agreed on scheduling their dues, but the ministry was not committed to the schedule, the official said.
The government recently placed a burden on the authority to import liquefied natural gas (LNG) as well as bearing the cost of oil shipment imports from its own income. This will cause a threat to the authority's financial status and increase its deficit, which will increase difficulties to pay foreign partner's dues within the next four years, an EGPC official said.
The Ministry of Petroleum assigned the case of LNG imports necessary for electricity stations to the EGPC for the upcoming period. This will allow the gas company to pay the price of the imported gas from its own internal income.
The official said the costs of importing LNG, approximately EGP 5bn depending on budget and the petroleum products subsidies bill, will be set by the end of the fiscal year with the Ministry of Finance.
He added that the government's inability to regularly pay the dues is a result of spending its domestic income on importing fuel, with the Minister of Finance's lack to provide the needed cash.
Doubling the imported gas amounts to billion cubic feet daily starting from 2016/2017

The amount of imported gas will double to reach roughly 1bn cubic feet daily starting from FY 2016/2017. This compares to 500m cubic feet next March, according to the Ministry of Petroleum's plan to produce and consume natural gas until FY 2017/2018, which was recently presented to the cabinet.
The plan stated that the gas deficit will worsen to reach 1.57bn cubic feet daily by FY 2017/2018, instead of 446m during the current FY (2014/2015). This is in case gas exports permanently stops.
Egypt's production of natural gas, according to the plan, will reach 4.85bn cubic feet of gas per day maximum by FY 2017/2018, with an increase in local consumption of gas expected to be 7.42bn cubic feet per day.
The plan also revealed that the local market's daily gas requirements will rise by about 1.44bn cubic feet by mid-2017. Power plants' daily consumption will increase to 726m cubic feet, and a rise in needs of other sectors of 781m cubic feet.
The plan included a gas deficit in the coming fiscal year, which will reach 1.017bn cubic feet daily after importing 500m cubic feet starting next March.
Average gas production will reach a daily maximum of about 5bn cubic feet, compared to 5.03bn cubic feet in FY 2014/2015. This will take place if partners commit to linking agreed projects on schedule.
The plan also revealed that the average gas consumption of power plants in FY 2015/2016 will reach 3.48bn cubic feet per day, compared to 3.23bn cubic feet during FY 2014/2015.
Gas consumption in other sectors will rise to 3.037bn cubic feet per day, compared to 2.74bn cubic feet during FY 2014/2015.
The plan also included the exporting of nearly 100m cubic feet per day to Jordan if available. The 15-year agreement signed between Egypt and Jordan in 2004 provides that 240m cubic feet will be supplied to Jordan daily.
The plan stated that 100m cubic feet of gas will be exported daily to the Idku liquefaction factory, a subsidiary of British Gas (BG). This will occur in the case of gas availability, and the contractual amount to be supplied to the factory is 1.1bn cubic feet per day.
Egypt signs agreements with a number of companies to import gas until 2020

Last October, Egypt offered a tender to import LNG, with four companies winning the tender, including British Petroleum (BP), multinational "Vitol," Trafigura, and Noble Clean Fuels. This will make available about 40 shipments of LNG per year starting from March.
It was agreed with Russian Gazprom to supply nearly 35 LNG shipments over the next five years, in addition to six shipments from Algerian Sonatrach during 2015, according to Minister of Petroleum Sherif Ismail.
Gazprom will export to Egypt about seven LNG shipments annually between 2015 and 2020.
A Memorandum of Understanding was signed with between EGAS and Cypriot company CH to develop some gas discoveries in Cyprus' Aphrodite field. A maritime line would be established extending from the discoveries' areas to Egypt.
Financial and technical details for the Cypriot import are being considered, as well as the supplying of the two liquefaction factories in Idku and Damietta, according to EGAS chairman Khaled Abdel Badie.
He added that American company, Noble Energy, is considering facilities to produce gas from Aphrodite, and pump it through a 400km pipeline to Egypt.
A delegation from Noble Energy visited Egypt this month to continue negotiations with EGAS to export gas to Egypt.
Noble Energy's plan for the development of the Aphrodite field within the coming years was discussed to determine quantities that Egypt will receive. The supplies will be used to power plants with their needs and save energy for the industrial sector in case it entered the Cypriot gas deal.


Clic here to read the story from its source.