El-Molla looking for alternatives to Aramco's contract to secure fuel

Petroleum Ministry refutes rumours of El-Molla visiting Tehran looking for new oil deals

The Egyptian General Petroleum Corporation (EGPC) is preparing to pose new tenders looking to cover the domestic market's needs of petroleum, to replace the suspended Saudi Aramco contract, until the Ministry of Petroleum concludes an agreement with another Arab country.
Undersecretary for media at the Ministry of Petroleum, Hamdy Abdel Aziz, denied rumors that Petroleum Minister Tarek El-Molla traveled to Tehran on Sunday to discuss cooperation between Egypt and Iran in the oil sector. He noted that El-Molla traveled to Abu Dhabi to attend the Abu Dhabi International Petroleum Exhibition & Conference.
He added that the minister will attend two sessions at the conference and return to Cairo.
According to Reuters, Iran's Mehr news agency quoted an Iranian official saying that El-Molla was en route on Sunday to Tehran to meet with the Iranian oil minister to discuss new oil agreements.
A government source told Daily News Egypt that Aramco's decision to suspend the supply of oil shipments from Saudi Arabia was a political decision. He added that the company did not inform Egypt of any details on the situation of the contract.
He explained that the only response received from Aramco included suspending the 700,000-tonne shipments for an unidentified period, without providing any reasons, since October.
The source noted that the Saudi government has also refused to comment on the decision.
El-Molla said in earlier statements that Aramco supplied $1.2bn worth of oil shipments over the past four months, equivalent to 700,000 tonnes of fuel shipments per month.
Moreover, he pointed out that the EGPC is posing a tender looking for a temporary supplier to cover the domestic needs of oil products in November.
El-Molla noted that Aramco used to supply 400,000 tonnes of diesel, 200,000 tonnes of gasoline, and 100,000 tonnes of fuel oil per month, adding that the contract was set for five years.
Furthermore, the contract between Egypt and Saudi Arabia included pricing the shipments at the time of supply according to international rates.
The Ministry of Petroleum had signed a commercial contract with Saudi's Aramco to supply oil shipments to Egypt for five years starting from May 2016, with an interest rate of 2% and a grace period of three years.
The total cost of these shipments is expected to amount to $30bn amid low global oil prices.

The Egyptian official's visit to Iran, Saudi Arabia's main rival in the region, may indicate further damage to the relations between Cairo and Riyadh.