CAIRO: Egypt plans to invest $14.5bn in developing its refining and petrochemicals sectors over the next five years, its oil minister said, as part of efforts to overcome an energy crisis that has led to near-daily power cuts and hit company profits.
It is also considering floating stakes in some state-owned oil companies on the Egyptian stock exchange.
Sherif Ismail said in an interview that Egypt was trying to boost its output of refined oil products by 5-10 percent each year, hoping to reduce its dependence on costly imports. “Total investments that will be implemented over the next five years will be around $14.5bn and include $12.5bn in the refining sector and $1.9 billion in the ETHYDCO project,” Ismail said, referring to a new complex that will produce ethylene and other petrochemicals.
Egypt has struggled to curb its swelling budget deficit whilst meeting soaring energy demands, resulting in daily electricity cuts around the country of 86 million people.
Lines at petrol stations and a shortage of gas that transformed Egypt from net gas exporter to net importer in recent years at huge cost to the state.
The government also took the politically sensitive step of introducing deep cuts to energy subsidies in July, which should help curb the deficit but have resulted in price rises of up to 78 percent on fuel and electricity. Ismail said Egypt was hoping to produce 5.4 billion cubic feet per day of gas and 695,000 barrels per day (bpd) of oil and condensates in the current 2014-15 financial year, and to import about 6.5 million tonnes of gas and petroleum products annually.
Most of the planned investments will be implemented by state-owned companies and be self-financed or part-financed by local banks, he said.
The oil ministry was also working with local investment banks to look at the potential for offering stakes in state oil companies on the Egyptian stock exchange as part of an effort to overhaul them and improve their finances, Ismail said.
He declined to give the names of the companies or of the banks involved but said the ministry could begin with about five companies, with the first being listed in 2015.
Among the largest projects in progress is ETHYDCO, which is set to produce 460,000 tonnes a year of ethylene and 400,000 tonnes of polyethylene when it comes online at the end of 2015.
The complex in Alexandria on the Mediterranean coast will be the largest producer of ethylene and polyethylene in Egypt and will save the country more than $500m a year that it currently spends on imports.
Ethylene and polyethylene are used in the production of plastics and chemicals.
Egypt is also expanding the Midor refinery, boosting its capacity from 100,000 bpd to 160,000 bpd with the additional output expected to come online at the end of 2017, Ismail said. Reuters
