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Ministry of Petroleum seeks to renew Aramco's contract for 3 more months Final agreement was not yet reached with Russian Rosneft on payment facilities, says official
The Ministry of Petroleum is negotiating with the Saudi Aramco to renew a contract to supply part of Egypt's fuel needs for three more months, and facilitate the payments for the petroleum shipments. A prominent official at the Ministry of Petroleum said the payment facilitations that were agreed upon with Aramco in that regard will end in November. He explained that the previous agreement with the Saudi company included the supply of 500,000 tonnes of diesel, 220,000 tonnes of Mazut, and 150,000 tonnes of benzene monthly. The Minister of Petroleum had agreed with Aramco on $1.4bn to supply petroleum substances shipments for three months, starting from September. The costs will be paid off after a year. Saudi Arabia is the largest oil exporter in the world, and a supporter to Egypt, next to the UAE and Kuwait. Billions of dollars in aid was given by the three Gulf states after the removal of president Mohamed Morsi in 2013. Saudi Arabia increased its crude oil production to 10.308m barrels in the second half of 2015, in order to support its share in the Asian market and feed local power plants and refineries. On the other hand, the official said a final agreement was not yet reached with the Russian Rosneft on the facilitations to pay for the petroleum substances shipments supplied by it. He added that if the contract renewal with Aramco is finalised, the rest of the local market needs will be provided through Rosneft. The local market requires an estimated 500,000 tonnes of diesel per month, 300,000 tonnes of butane gas, 150,000 tonnes of benzene, in addition to 500,000 tonnes of Mazut, according to a report by the Egyptian General Petroleum Corporation (EGPC). The local benzene consumption amounts to 6.1m tonnes annually, 2.7m tonnes of which is 80 octane, followed by 92 octane with total consumption of 2.5m tonnes, and 95 octane with about 400,000 tonnes, according to the state's general budget for fiscal year 2014/2015.
