Fahmy: Time for Russian ties

Over the past two months, there have been intensive discussions and negotiations between the Egyptian petroleum top officials and their Russian counterparts studying the means to bolster the mutual cooperation between the two countries. Why is Russia becoming today’s world attention? What benefits would the Russian cooperation generate to Egypt? Hady Fahmy, President of the Egyptian Chamber of Petroleum and Mining sheds lights on the fruitfulness of the Russian-Egyptian ties

In last October, Fahmy headed the Egyptian delegate group in the International Energy Week (IEW) and Arabia Expo 2008, held in Moscow. This has been a gateway for the Egyptian officials to exchange views about the possible means to strengthen the mutual cooperation between the two countries in the oil and natural gas fields.

First of all, we all know that Russia has become a major key player worldwide, in all aspect, said Fahmy.

“Everybody is approaching Russia nowadays, especially the Arab world. It is becoming a mega power in all aspects, whether economically or in the petroleum field,” said Fahmy. “In addition of being the world’s largest producer and exporter of natural gas, Russia produces around eight million barrels of oil a day.”

Moreover, Russia’s business system opens the door widely for a diversity of cooperation; as Fahmy clarified, the country has two systems for doing business, the free enterprise and the controlled economy. “I believe it is the right time to get the opportunity of doing business with Russia.”

During the IEW 2008, Fahmy held intensive meetings and talks with Russian officials; one of his meetings was with Livery Barmakov, Chairman of the Russian Chambers of Industries and former prime minister of the Soviet Union, who expressed his appreciation for the Egyptian efforts in the oil and gas sector and his eagerness to deepen the ties between the two countries.

Fahmy further added that the participation in IEW 2008 was followed by a formal ministerial visit to Russia, earlier last month, headed by the Egyptian Prime Minister Ahmed Nazif accompanied by Eng. Sameh Fahmy, Minister of Petroleum, through which several agreements were signed, while old ones were renewed.

“The latest visit of the Egyptian Prime Minister to Russia was really crucial in this time, especially that as I mentioned earlier that world’s attentions are moving towards Russia. Few protocols regarding the natural gas and mining were signed and several Russian companies, such as Vertex, Novatek and Gazprom are currently approaching Egypt,” clarified Fahmy.

The outcomes of this ministerial visit were not limited to agreements signing, but they included protocol for exchanging expertise, one of the main highlights of this visit. “As an attempt to strengthen the Egyptian personnel in the mining industry, around 40-60 Egyptian graduates to receive scholarships from the Russian Mining University for three or four years and get their degrees.”

Commenting about the Russian attempt to establish an organization for the natural gas, similar to the Organization of Petroleum Exporting Countries (OPEC), Fahmy said that such idea should be well studied before being executed. “Such decision shows that the future of natural gas is yet undetermined and precise expectations cannot be made, especially that Russia is playing the upper hand role.”

Russia has been declaring that a gas cartel to be initiated in association with Qatar and Iran (world’s top three natural gas producers) and are also approaching Algeria and Egypt to join them.

“The future of natural gas depends on what happens today,” declared Fahmy.

The concept of having a cartel for natural gas is very sensitive, whether Egypt would accept joining the group or not is still unknown. The Petroleum Ministry is conducting its research and studies about this idea, declared Fahmy.

“I believe that this cartel has to be established one day or another. The natural gas industry is still a new comer; it has always been associated with oil; however, different measures and agreements are currently implemented for the natural gas. Gas is clean, easy to get and symbolizes high revenues. In addition, it does give strength to the oil reservoir. It can keep the oil for an extra 20 or 30 years.”

Asked about the measures taken to prevent the negative effects of the current economic crisis on the Egyptian petroleum industry, Fahmy said that we should be frank with ourselves; most of the organizations are down sizing their activities and shrinking their investments to reduce their costs and expenses. Therefore, we should maintain the investments of our foreign partners through the local corporations, such as the Egyptian General Petroleum Corporation (EGPC), Egas…etc.

As President of the Chamber of Petroleum and Mining Industries, Fahmy clarified that more attention should be given to the mineral resources. Fahmy added that focusing on strengthening the country’s mineral resources and formulating a law for it are on the top of the 2009 agenda of the Chamber.”

As for his personal opinions concerning the future of the Egyptian petroleum sector, Fahmy believes that Egypt will become a hub for the oil and gas in the region, taking into consideration not only the oil and gas reserves the country holds, but also its political stability. “We are on the right track; however, we are repeatedly criticized. We have a tough job and without the efforts carried out over the years by Eng. Sameh Fahmy and the former petroleum ministers, Egypt would not have received $20-billion products a year.”


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