Breakfast Wrap: Oil Companies In Egypt, Elitism in Politics, Strikes Impact Economy

In case you were wondering, Egypt continues to attract investment from foreign oil partners and the billion of dollars they are owed by the Egyptian government is not putting them off, the head of the state-run gas company Egyptian Natural Gas Holding Co told Bloomberg yesterday.

Chairman Mohamed Shoeib was so positive in fact that he said his company’s debts to overseas partners “aren’t that high,” without being more specific.

It’s a strange comment at a time when Egypt clearly owes even small and medium sized oil companies such as UK-based Dana Petroleum (not to be confused with the UAE-based Dana Gas) tens of millions of dollars.

But one thing is for sure, for those companies able to restructure their debt and continue as planned with their exploration, Egypt still offers massive potential for proven and unproven reserves.

Ω

It’s been a big week for Egypt subsidies announcements, with the oil ministry outlining plans for a blanket cash payment handed out to both rich and poor.

So it is only natural that the Egyptian government attempts to calm the population who may be concerned about dramatic changes in this very contentious matter.  Yesterday, Osama Kamel, the oil minister, did just that essentially telling reporters that there is no intention to abolish subsidies for those who need it.

Nice public relations management Mr Kamel. It’s important that while the government develop their subsidy plans, the public is 100% informed.

But then it all went wrong.  Mr Kamel, perhaps by slip of the tongue, called the people who need subsidies the most “simple citizens,”  or that is how it is roughly translated from the Arabic version linked above.  This derogatory term  referring to vulnerable people in society only serves to instil the elitist perception of Egypt’s government that has carried over from the previous regime under Hosni Mubarak.

Politicians as merely civil servants doing a duty for the greater good and for their country (or at least that’s the idealistic version).  MPs are not “His or Her Excellency” nor are they “My dear Lord”.  They are our servants and work for us.  

Ω

The strikes at Ain Sokhna port, operated by Dubai-based DP World, has escalated.  The company has filed charges against striking workers, accusing them of costing the company 40 million Egyptian pounds ($6.5 million) in just five days.

The majority of losses accrued came from fines by shipping companies. The company claimed the losses also harm the Egyptian economy.

Rebel Economy, earlier this week analysed the deeper impact on a country of successive strikes, and how that country’s economic competitiveness could be permanently damaged.

Ω

Some positive news at last.  A hike in Egyptian exports to Libya drove an increase in the value of Egyptian exports in September 2012 on an annual basis for the first time in six months, according to the latest release from the Industry and Commerce on Monday, Al Ahram reported.

Ω

Egypt’s regulator has given the green light for EFG Hermes to create a jointly-owned investment bank with QInvest of Qatar, Reuters reported, cementing the deal and ensuring once and for all that there are no pesky hostile takeovers planned (a la Planet Investment Banking).

In May, EFG Hermes and QInvest agreed to hive off EFG Hermes’s investment banking business into a joint venture in which state-backed QInvest would hold a 60% stake.

Ω

It looks like some headway is being made in rebuilding infrastructure in Iraq, nine years after the US-led invasion that toppled Saddam Hussein.

Iraq plans to spend up to $1.6 billion on solar and wind power stations over the next three years to add 400 megawatts to the national grid to help curb daily blackouts, an official from the ministry of electricity told Reuters on Monday.

Similar to countries such as Libya, investment is desperately needed in most sectors of Iraqi infrastructure, not least power generation.

Ω

The Qataris keep splashing their cash in the region, with an agreement between Egypt-based Nile Capital and a member of Qatar’s royal family to establish a fund of up to $300 million that will invest in education across the Middle East and North Africa

Nile Capital Qatar, a partnership between the Egyptian investment firm and Sheikh Jabr bin Hamad al-Thani, the eldest son of the prime minister of Qatar, expects to raise close to $150 million for the fund’s first closing by the end of the first quarter next year.

Still, that seems like pocket change compared to the billions of dollars Qatar has pledged and sent through to Egypt’s central bank to prop up the currency.

The irony is that Egypt and the rest of North Africa, and the Middle East would be better off siphoning money to education and healthcare rather than protecting a downward spiral in the currency.




Post a Comment

Your email is kept private. Required fields are marked *