The Egyptian General Petroleum Corporation (EGPC) sent its periodic letters to companies in the sector, noting that the exchange rate used to calculate the value of the foreign partners’ share of oil and gas following the flotation of the Egyptian pound reached EGP 17.
A source in the petroleum sector told Daily News Egypt that foreign partners receive a big part of their shares of oil and gas in Egyptian pounds after the flotation, which achieved a considerable saving for the partners.
He explained that foreign partners reimburse the value of technical services and wages in pounds since the foreign currency shortage in the Egyptian market started, adding that they received discounts of up to 40% on the value of renting equipments and technical services on the back of the fall that hit oil prices in the global markets.
Entitlements of public foreign companies in the field of oil and gas extraction owed by the EGPC at the end of 2016 were estimated at $3.5bn.
The source noted that the economic conditions in the country have hindered the government’s ability to repay dues to foreign partners since August 2015.
He pointed out that the share of foreign companies in oil and natural gas fell to $650m in the current fiscal year, down from $880m in the previous fiscal year.
The share of foreign companies in crude oil is estimated at $380m per month, compared to $600m in the previous fiscal year, as the Brent oil price remains low.
The source added that the partners’ share in the gas will not be very affected by the lower price of Brent, where it amounted to $270m a month compared to $280m in the previous fiscal year.
Egypt produces about 4.45bn cubic feet of gas per day and 695,000 barrels of crude oil. The production is directed to the local market, while the Ministry of Petroleum gets the foreign companies’ share of gas and oil.