Egypt receives $650m fuel shipments from Saudi Arabia in May and June

Egypt obtained shipments of petroleum products—benzene, diesel, and mazut—worth approximately $650m in May and June, as part of the agreement with Saudi Arabia on supplying part of the country’s fuel needs for five years.

Minister of Petroleum and Mineral Resources Tarek El-Molla told Daily News Egypt that petroleum shipments worth $300m were received in May.

He added that the value of fuel shipments this month will reach $350m, driven by the global increase in oil prices.

He explained that the contract with the Saudi side stipulates calculating the value of petroleum products according to global prices at the time of supply.

The Ministry of Petroleum signed a commercial contract with Saudi Arabia’s Aramco to supply Egypt with petroleum derivatives for five years, starting from last May, at an interest rate of 2% and a grace period of at least three years.

The total cost of these shipments is expected to amount to $30bn amid low global oil prices.

Saudi King Salman bin Abdulaziz Al-Saud had earlier issued a decree to secure Egypt’s needs of petroleum over the next five years. He also gave directives to increase Saudi investments in Egypt.

El-Molla said that the average monthly consumption of petroleum products and natural gas stands at 6.5m tonnes, of which 4.2m tonnes are secured locally.

He added that Egypt imports 2.3m tonnes of petroleum products a month to meet the demand of the local market.

Egypt produces a gross domestic production of crude oil estimated at 695,000 barrels per day. The Ministry of Petroleum and Mineral Resources seeks to increase that number to 700,000 during the next fiscal year.

Furthermore, Egypt produces about 4bn cubic feet of gas per day. It imports 1.2bn cubic feet from gasification ships, as well as the gas trading line with Jordan.

source: Daily news Egypt