Egyptian General Petroleum Corporation (EGPC) presented a report detailing its expected monthly petroleum needs to the Ministry of International Cooperation for the latter’s negotiations with Saudi Arabia.
A senior official at EGPC told Daily News Egypt that Saudi Arabia will provide petroleum shipments of gasoline, diesel, and fuel oil, allowing for long-term repayment periods.
The cabinet praised the initiative of the King of Saudi Arabia Salman bin Abdul Aziz Tuesday to help Egypt meet its petroleum needs over the next five years and to increase Saudi investments that will total more than SR 30bn ($8bn).
“We will start consultations to activate this initiative by presenting all investment opportunities available in Egypt to attract Saudi investments and receive petroleum products,” according to a cabinet press statement Wednesday.
Prime Minister Sherif Ismail headed the Egyptian-Saudi coordination committee meeting Tuesday to discuss increasing trade and investment between both countries. The government presented a bundle of projects in different sectors to Saudi Arabia.
Minister of Petroleum Tarek El-Molla said in a press statement that he will discuss the mechanism for implementing the Saudi directives.
The Saudi Press Agency said a follow-up meeting between Saudi Arabia and Egyptian officials will be held in Riyadh on 5 January. Ismail met with Crown Prince Mohammed bin Salman and the Minister of Defence earlier this month.
The official said EGPC asked for $300m worth of petroleum products shipments from Saudi Aramco Company, which is the remainder of the quantity agreed upon in the contract to provide $1.4bn over three months, which ended in November.
The Ministry of International Cooperation is negotiating with Saudi Arabia on renewing Aramco’s contract with credit facilities, in addition to the supply of the remaining amounts.
The official said the previous contract with the Saudi company included the provision of 500,000 tonnes of diesel, 220,000 tonnes of fuel oil, and 150,000 tonnes of gasoline a month.
The Ministry of Petroleum and Aramco signed a contract for facilitations of about $1.4bn for the supply of shipments of petroleum products over a period of three months that started in September. The value of the contract will be paid a year after the confirmation of the contract.
Saudi Arabia is the largest oil exporter in the world along with the UAE and Kuwait. The three Arab states provided Egypt with billions of dollars worth of aid after ousting Islamist president Mohamed Morsi in July 2013.
Saudi Arabia increased its raw production to 10.308m barrels during the second half of 2015 to enhance its share in the Asian market and nourish local power plants and refineries.
An EGPC report estimated the needs of the domestic market at 500,000 tonnes of diesel, 300,000 tonnes of butane, 150,000 tonnes of gasoline, and 500,000 tonnes of fuel oil per month.
The annual domestic consumption of gasoline is 6.1m tonnes, of which gasoline 80 takes up nearly half (2.7m tonnes), followed by gasoline 92 (2.5m tonnes). Gasoline 95 accounts for about 400,000 tonnes, according to figures in the closing account of the FY 2014/2015 budget.