Egypt plans to invest $14.5 billion in developing its refining and petrochemical 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, Egypt's minister of petroleum and mineral resources told Reuters that Egypt was trying to boost its output of refined oil products by 5-10 per cent each year, hoping to reduce its dependence on costly imports.
"Total investments that will be implemented over the next five years will be around $14.5 billion and include $12.5 billion 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 were among the public grievances against former President Mohamed Mursi of the Muslim Brotherhood.
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 tons of gas and petroleum products annually.
Most of the planned investments will be implemented by state-owned companies and 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.
