UPDATE 3-Egypt to import Libya oil, pay down energy debt

Wed Mar 27, 2013 2:32pm EDT

Related Topics

* Egypt to import 900,000 barrels of Libyan oil per month

* First shipment to arrive in April

* Egypt to pay $1bln in debts to foreign energy firms in two weeks

* Libya denies reports Tripoli will deposit $2bln in Egypt c.bank (Adds Libya PM, central bank official)

By Asma Alsharif and Regan Doherty

CAIRO/DOHA, March 27 (Reuters) - 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 said, in steps aimed at easing energy shortages that are hitting the economy.

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.

Libya will provide Egypt with the equivilent of one million barrels of crude per month at world prices to support the economy, Nouri Berouin, chairman of the Libyan National Oil Company, told Libya's state news agency.

With its foreign currency reserves at critical levels, Egypt has cut back on some planned oil imports, traders said early this month. The economy has been hit by two years of unrest since Hosni Mubarak was deposed.

Libyan Prime Minister Ali Zaidan also said his country was considering extending financial aid but had yet to decide whether to deposit $2 billion at Egypt's central bank as reported by several newspapers this week.

"It has been under consultation. This issue has not been decided yet," Zaidan told reporters in the Qatari capital Doha when asked about the reports. He declined further comment.

A Libyan central bank official told Reuters that Tripoli with its sovereign wealth fund would continue to look for investment opportunities in Egypt.

"Libya owns stakes in three banks in Egypt and companies in various sectors. We will invest whenever these companies need liquidity, debt repayments and capital for operation," he said, declining to be identified.

"Our investments in Egypt are very strategic and we will do what's needed to support that. Egypt's security and stability are as important to us as our own," he added.

DEBT

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

Osama Kamal, the Egyptian oil minister, was quoted by the Egyptian newspaper Al Mal as saying the government recently paid $1 billion in debt to foreign energy firms and that another $1 billion would be coming in a fortnight.

"The Libyan petrol shipments will arrive next month," Kamal was quoted as saying in a separate report in Al Borsa newspaper. In Egypt "petrol" is used to refer to crude oil.

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 meet with several foreign firms this week to discuss new means to pump additional supplies of gas.

The government is working on an economic programme 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 subsidised 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 was looking at a proposal to replace the smart card plan with a system based on mobile phones, indicating the government has yet to finalise the rationing plan. He did not give a time frame. (Reporting by Asma Alsharif and Ulf Laessing in Cairo, Tarek Amara in Tunisia, Regan Doherty, Yara Bayoumy and Mirna Sleiman in Doha, editing by William Hardy)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.