“The final draft for the modified natural gas prices is near completion. The new prices will significantly aid Egypt in securing its needed quota of natural gas,” answered Eng. Abdallah Ghorab, Egyptian Minister of Petroleum to a question about the price amendments of exported natural gas.
Ghorab expressed, in an interview with the state-run newspaper Al-Ahram, a great deal of optimism towards the future of Egypt’s petroleum wealth, since as the vision for prospective investments becomes clearer. He stressed that the Ministry is abandoning the tradition of pampering investors.
Moreover, he warned Egyptians of following speculative and unsubstantiated rumors that aim to jeopardize stability and confidence, assuring that the Egyptian petroleum sector is capable of sufficiently securing the needs of the Egyptian people.
“Negotiations on the Israeli and Jordanian fronts are in progress, and they have been since the earliest days of the revolution. We are at the stage of concluding the final draft of all exportation contracts, with new prices that will benefit the Egyptian economy while remaining in accordance with international natural gas prices,” explained the Minister the current status between Egypt, Israel and Jordan regarding the modification of natural gas prices.
The minister refused to reveal the new agreed-upon prices explaining that the confidentiality of such sensitive information is integral in strengthening Egypt’s negotiating position with prospective importers. He also explained that the gas pipeline to Israel has been out of commission since the first bombing occurred, indicating that the recent bombings were intended for the sake of threatening Egypt’s security and inciting instability that would deter foreign investors and force them to seek safer options elsewhere.
Ghorab referred to the latest $11 billion natural gas project with BP as a proof for the firmness and sustainability of foreign investments in Egypt. “This project is to be executed within the coming five years and is expected to create over 5000 jobs; BP has already injected $5.1 billion in investments and is expected to provide the rest in the coming years… BP’s operations in Egypt have not been disrupted, as opposed to its situation in Libya, where it had to pull out after investing close to $700 million.”
He further added that some major oil producers, such as Apache and ENI have expressed strong interest in expanding the scale of their operations in Egypt. “ENI has increased exploration and production operations in Sinai, Western Desert and the Mediterranean, investing up to $3 billion. In addition, the Malaysian producer Petronas is investing $2.5 billion in projects in conjunction with BP,” declared Ghorab.
The Petroleum Minister revealed that he would submit a proposal to the Supreme Energy Council regarding the modifications of the subsidies’ bill. “It makes no sense for the EGPC to subsidize energy cost for industries that already generate considerable profits. Therefore, the EGPC will no longer subsidize energy cost to such industries, placing citizens’ accessibility to energy at the top of its priorities,” Ghorab told Al-Ahram.
Asked about the recent problem of diesel and benzene shortage, he replied by clarifying that the crisis was the result of malicious rumors spread by anonymous people to incite instability, which oil smugglers capitalized on by trafficking petroleum products across the eastern boarders to the Palestinian territories.” In terms of production, we are not facing any problems and the ministry is in full control of production operations. He pointed out that during the crisis, the ministry took an initiative to overcome the shortage in the market by injecting over six billion tons of oil. The ministry also plans on installing monitoring devices in oil-transportation tankers as well as stations to keep a meticulous record of consumption and hinder the chance of siphoning gas from stations
On the other side, Ghorab highlighted that the daily sales of natural gas have reached approximately 6 billion cubic feet, and is expected to reach 6.3 in the year 2011/2012. He also stated that there are nine projects to develop new wells, at a total cost of $1.7 billion.
“This year, Egypt’s proven natural gas reserves have reached 77.5 trillion cubic feet.” Ghorab affirmed that these figures are correct and accurate and refused the accusation of releasing overestimated data. “The ministry will not benefit in any way by announcing inflated figures. As I mentioned in the beginning of the interview, the days of misleading the public are over, there is no room but for facts, and we will not act with favoritism towards anyone.”