Cairo – Mubasher: Egypt's Petroleum Ministry announced in Wednesday an agreement with Saudi Aramco to resume oil shipments after stoppage for several months.
Egyptian General Petroleum Corporation (EGPC) signed a deal with Aramco to receive 700,000 tonnes of refined petroleum products per month for five years at a value of $23 billion.
The deal was signed during Saudi King Salman Bin Abdel-Aziz’s official visit to Egypt in 2016.
Egypt's petroleum minister said in a statement on Wednesday that recently there has been communications between Egypt and Aramco to resume oil shipments, especially since the agreement is still valid.
El-Molla added that Aramco explained in a note that delaying the shipments was due to commercial circumstances in line with the fluctuations seen in oil prices globally, and with Saudi Arabia lowering its oil production while refineries were under periodic maintenance.
In April 2016, a memorandum of understanding was inked between Saudi Aramco and Egypt's Arab Petroleum Pipelines Company SUMED to increase Saudi oil supply to Europe.
By this agreement, Egypt’s Sidi Kerir and Ain Sukhna terminals will be used by Saudi Arabia to pump higher volume of Oil into Europe, Tarek El-Molla, Minister of Petroleum said earlier.
In addition, the agreement also entails the use of Sumed’s facility for storing Saudi oil, along with turning Sidi Kerir into a regional hub for Saudi crude oil.
The ministry of petroleum's official spokesman Hamdy Abdel Aziz had told Mubasher in October that Saudi Aramco notified the Egyptian General Petroleum Corporation (EGPC) of the suspension of the agreed oil shipments.
Later in October, the Egyptian Cabinet’s Information Decision Support Center (IDSC) stated that Aramco’s suspension of oil shipments doesn’t mean the agreement between the oil firm and EGPC has been cancelled.
As a result for the suspension, EGPC had contracted 700,000 tonnes of diesel and gasoline from international markets, an amount that was supposed to be supplied by Aramco, added Abdel Aziz.
Abdel Aziz noted that in November, the Kuwaiti government approved renewing the 2014-signed oil supply agreement with Egypt as of January 2017.
"The agreement provides that Kuwait imports two million barrels of crude oil with a nine-month grace period", Abdel Aziz told Mubasher in a phone call.
Egypt also signed an agreement with the State Oil Co. of the Azerbaijan Republic (Socar) in early November to supply the Egyptian refineries with crude oil.
Crude oil prices range between $44-55 per barrel, after it dropped from $115 in June 2014 to $30 per barrel in last January, due to global supply glut.
Egypt decreased petroleum subsidies 42.6% to reach EGP 35 billion in the fiscal year 2016-2017, compared to EGP 61 billion in FY 15-16, according to finance ministry data.