Experts in the oil and gas sector are predicting that exploration is likely to increase in Egypt after it was revealed that many believe the nation’s president will be reducing subsidies and easing demands on domestic energy costs. Those drilling in the country previously had to sell fuel in the domestic market for a far lower price than they would have gained elsewhere; however, market leaders predicted at a conference in London on 27th June that President Abdel-Fattah El-Sisi would ease the current constraints to attract new investment, meaning that companies may once again see Egypt as a nation ripe for exploring.
Several organisations are expecting the president to stay true to his word and act on matters so that subsidies of over $20bn per year will be reduced. Petroceltic International plc (PCI), Citadel Capital SAE and Circle Oil plc (COP) revealed that the expected plans from the Egyptian government would see the budget deficit cut, resulting in suppliers finally being paid the outstanding debt on fuel. The managing director of Cairo-based Citadel, Mohamed Shoeib, explained that this is an essential step for Egypt if the country is to attract investors back to the nation after many shied away from investing due to recent turmoil. Mr Shoeib said officials “should tackle the problem and not escape it”, adding: “It should happen very soon.”
In the latest report by Reuters, published on 26th June, it was revealed that at least $1.5bn of energy supply debt is scheduled to be paid off by Egypt by the close of 2014. This is approximately one-quarter of its current debt and could ingratiate energy companies to start doing business once again.
Several industry leaders have expressed that things could be about to change in Egypt, with Paul Welch, chief executive of Sea Dragon Energy Inc, saying: “The time is great now to get involved in Egypt”. Elsewhere, Petroceltic’s chief operating officer, David Thomas, explained that a major change is needed in the price of gas. Whilst oil producers are paid international prices by Egypt, gas suppliers only get a fraction of the exportation price when selling to the domestic market; as selling to the domestic market is a requirement, many companies have opted not to invest in the nation at all.
With changes afoot and President El-Sisi widely expected to ease the pressure on oil and gas suppliers, the situation could be about to change in Egypt.
This article was written by Montash.
Montash is a multi-award winning, global IT recruitment firm. Specialising in permanent and contract positions across mid-senior appointments which cover a wide range of industry sectors and IT functions, including:
ERP, BI & Data, Information Security, IT Architecture & Strategy, Scientific Technologies, Demand IT and Business Engagement, Digital and E-commerce, Infrastructure and Service Delivery, Project and Programme Delivery.
With offices based in London, Montash has completed assignments in over 30 countries and has appointed technical professionals from board level to senior and mid-management in permanent and contract roles.