ENERGY

Egypt to import Libya oil, pay down energy debt: reports

Egypt is to import 900,000 barrels of Libya oil a month starting in April and is paying off its energy debts to foreign energy firms. (Photo Courtesy: prosernat.com)

Egypt will import 900,000 barrels of oil a month from Libya starting in April and is paying off some of the money it owes to foreign energy firms, its oil minister was quoted as saying on Wednesday.

Osama Kamal, cited by local media, said Egypt, where an economic crisis has led to fuel shortages, had recently paid $1billion in debt to foreign energy firms and that another $1billion would be coming in a fortnight.

“The Libyan petrol shipments will arrive next month,” Kamal was quoted as saying in local newspaper Al-Borsa. In Egypt “petrol” is used to refer to crude oil.

The Egyptian government is estimated to owe billions of dollars to oil producers working in the country, though the government last month disputed an estimate that put the debt at $9 billion.

On Monday the Libyan oil minister, Abdul-Bari al-Aroussi said Libya plans to refine some of its crude oil in Egyptian refineries to support the Egyptian economy which is struggling after more than two years of political unrest.

Kamal also said in comments carried by local daily Al-Mal newspaper he would will meet with several foreign firms this week to discuss new means to pump additional supplies of gas.

Egypt, which has endured over two years of political instability since the overthrow of President Hosni Mubarak in 2011, is struggling with sliding currency reserves, falling tourism and a soaring budget deficit.

It has cut back on some planned oil imports, traders said early this month, as it watches its foreign reserves fall and it seeks loan funding.

The government is working on an economic program where it plans to cut back on subsidies of fuel. Last year it eliminated subsidies on 95-octane gasoline, the highest grade available, and it raised fuel prices in many sectors last month.

The government had plans to start a scheme to ration subsidized motor fuel using smart cards available to drivers of vehicles with smaller capacity engines in July.

In remarks carried by local daily Al-Masry Al-Youm, Kamal said the government is looking at a proposal to replace the smart card plan with a system based on mobile phones, indicating the government has yet to finalize the rationing plan. He did not give a time frame.
 

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Last Update: Saturday, 30 March 2013 KSA 11:37 - GMT 08:37
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