Egypt’s Top Refinery Hopes Expansion Will Revive Exports
Egypt’s largest oil refinery hopes a planned expansion will allow it to export after years of production being diverted to the domestic market, the company’s chairman said in an interview at the Midor refinery.
Mohamed Abdel Aziz said the refinery would increase capacity to 160,000 barrels per day by end-2017 from 100,000 barrels now.
That would allow Midor, which provides a quarter of the country’s petroleum product needs, to help Egypt face a growing energy crisis and eventually export, he said.
“Midor wants to increase production to meet Egypt’s energy requirements and have the capacity to be able to refine for others,” Abdel Aziz said.
Egypt has struggled with soaring energy bills caused by high subsidies it provides on fuel for its population of 85 million.
President Abdel Fattah el-Sisi’s government raised fuel prices by up to 78 percent this summer.
But the subsidies will still weigh on the budget and foreign energy firms remain wary about investing in a country that has decided over the past year to divert most energy earmarked for export to the power-hungry domestic market.
Before the 2011 revolution that ousted Hosni Mubarak and unleashed three years of political and economic turmoil, the Midor refinery refined petroleum products for Shell, Vitol and others, Abdel Aziz said.
“But since the revolution, all of our production has gone to the local market.”
The expansion at the refinery, which is owned by Egypt’s main state-run oil company, is expected to cost about $1.2 billion with 40 percent of it self-financed and the rest coming from banks.
“We are studying contracts with three international companies for refining on their behalf,” Abdel Aziz said.
“We began negotiating in May with Sudan on refining a million barrels per month at a price of $8 a barrel.”
Midor’s profit fell to $98 million in 2013 from $112 million in 2012.
Abdel Aziz expected profit to fall again in 2014 due to lower prices for oil and petroleum products.
Source: Reuters
