Egypt's energy reforms spark rush of oil and gas deals

Fri Feb 6, 2015 1:59am EST
 
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* Oil company debt repaid in-kind with exploration deals

* Three major oil and gas deals worth $9.2 bln in works

* LNG to align Egyptian fuel prices with global trends

By Oleg Vukmanovic and Shadi Bushra

MILAN/CAIRO, Feb 6 (Reuters) - Energy-hungry Egypt's willingness to push fuel market reforms and stick to debt repayment plans has led to an unexpected resurgence in oil and gas exploration and supply deals previously delayed by political upheaval.

The country has emerged as a major new oil and gas market as the government looks to ease the worst energy crunch in decades.

In January alone Egypt clinched 15 new exploration deals, amended two more, and closed major tenders to import liquefied natural gas (LNG) from Algeria to Russia, opening up to global energy pricing norms as the government seeks to scrap crippling subsidies by 2019.

Explorers lured by rising earnings on oil and gas production set by the state are seeing the country in a new light even though some are still owed billions, said Martijn Murphy, North Africa upstream research analyst at Wood Mackenzie.

The country of about 90 million relies heavily on gas to generate power for households and industry.   Continued...