Daily News Egypt

PricewaterhouseCoopers, MCK, Ernst & Young are competing to develop a strategy to restructure Ministry of Petroleum  - Daily News Egypt

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PricewaterhouseCoopers, MCK, Ernst & Young are competing to develop a strategy to restructure Ministry of Petroleum 

The ministry is intending to exit from non-oil companies, and increase the spaces offered for exploration

Three companies are competing to win the contract for the preparation of a detailed strategy for restructuring the Ministry of Petroleum and its subsidiaries. Only PricewaterhouseCoopers, MCK, and Ernst & Young made it to the final stage of the tender.

Sources told Daily News Egypt that the list of the competing companies originally included financial consulting and audit firm PricewaterhouseCoopers-Egypt, Logic Management Consulting Company, McKinsey Global (MCK), and Ernst & Young Financial Consultancy and Auditing, in addition to the US Navigant Consulting Company.

The Ministry of Petroleum offered a tender earlier to select companies to develop an integrated strategy for the petroleum sector and the ministry’s subsidiaries, and ended up with a shortlist of three companies.

The sources said the companies are supposed to submit their offers by mid-March.

They added that the World Bank will be the financier of the company that will win the implementation of the strategy.

According to the Ministry of Petroleum and the agreed programme with the International Monetary Fund (IMF) to strengthen the financial resources and competition, the ministry hired an external consultant to conduct a diagnostic study for the sector and will begin the development of a medium-term reform strategy for the energy sector in March.

The development plan of the Egyptian General Petroleum Corporation (EGPC) includes oil subsidy reforms; measures to improve efficiency, transparency and accountability in its operations; developing a strategy to deal with the payment of arrears; and reducing the outstanding arrears gradually, along with avoiding the accumulation of new arrears.

Logic Management Consulting Firm completed the establishment of a specialized unit in the Ministry of Petroleum to set an integrated strategy for the sector and ensure its implementation within weeks.

The sources said that the establishment of a unit within the Ministry of Petroleum is based on six main themes in order to advance the petroleum sector.

She explained that the first theme depends on attracting more investments to the sector for the elicitations and explorations sector. The sources pointed out that production began to decline during past years due to the lower rates of explorations.

The sources noted that the ministry is seeking to double the space offered for explorations as well as reducing the period of the contract with the exploration companies. .

The second theme depends on setting an integrated management structure for the companies affiliated with the Ministry of Petroleum. One of the most important plans is to set a neutral party between companies and customers for arbitration amongst themselves. The Ministry of Petroleum started with the gas sector to develop a special structure among companies.

The sources revealed the intention of the Ministry of Petroleum to exit from companies that are not related to production as soon as possible.

They pointed out that the study allows the importation of petroleum products to the private sector rather than only the government.

For a long time the Ministry of Petroleum has been studying allowing the private sector to import the petroleum products. The studies included selling the products with a unified price.

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