UAE to provide Egypt with $9bn in oil products

01 September 2014

Egyptian General Petroleum Company agrees a $9bn deal with Abu Dhabi National Oil Company

The UAE has reached an agreement with Egypt to provide the North African nation with petroleum products worth about $9bn.

The deal is due to come into effect on 1 September 2014, according to a statement by Egyptian Oil Ministry spokesman Hamdy Abdelaziz that was seen by the news agency Reuters.

The contract is between state-run Egyptian General Petroleum Company and its counterpart, Abu Dhabi National Oil Company (Adnoc), according to Abdelaziz.

Egypt is currently experiencing its worst energy crisis in decades, as domestic demand for natural gas increases and gas production slows.

The government owes billions of dollars to international energy companies, something that has made the companies reluctant to invest in Egyptian oil and gas assets.

Following the 2013 military coup that involved the hundreds of protesters being killed on the streets of Cairo, Gulf states including the UAE, Kuwait and Saudi Arabia have given financial support to the Egyptian government totalling more than $30bn.

The latest deal between the UAE and Egypt comes in the wake of a joint military operating to bomb militias linked to the Muslim Brotherhood in Libya.

In July, UK energy firm BG Group said it was limiting investment in Egypt due to the $1.5bn it was owed by Cairo at the end of June.

While activity at BG’s liquefied natural gas (LNG) plants has slowed, there has been progress on some upstream projects. On 30 August, BG Egypt announced it had upgraded the well control system for its offshore West Delta deep marine concession

In August, gas production started from the Denise and Karawang (DEKA) offshore gas project, which involves Italy’s Eni and UK energy company BP.

Germany’s RWE Dea also started production from its Central Treatment Plant (CTP) in the Egyptian Nile Delta.

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