EFG Hermes Expects Lower Oil Prices for Egypt

Source: Al Masry Al Youm 10/29/2014, Location: Africa

EFG-Hermes expected lower oil prices as clearly positive news for oil-importing MENA. Egypt, Morocco, Jordan and Lebanon are likely to enjoy the biggest gains, Egypt's largest investment bank said in report.

"Egypt will benefit, as it recently has become a net energy importer, though it has been increasingly exporting crude oil in recent years to cover for shortfalls in natural gas exports," said EFG Hermes's Economist Dima Jardaneh.

World crude oil prices have declined by over 20 percent since June 2014 the Energy Collective said in report.

The world's most important thinkers on energy and climate added that while this level of price volatility is not without historic precedent, prices are projected to possibly decline to much lower levels by year’s end, the Energy Collective said in report.

"Gains are most likely to be felt on the trade balance, including for Egypt, which remains a net importer of energy," Dima added.

Egypt has already embarked on aggressive fuel subsidy reform, cutting nearly a fifth of total fuel subsidy bill.

On the downside for Egypt, one may argue that lower oil prices could impact the level of in-kind assistance and financial support that Egypt is expected to receive from GCC donor states, namely Saudi Arabia, Kuwait and the UAE, Dima explained.

She continued: "In spite of the lower oil prices, we expect the GCC donor states to continue to provide support to help bridge Egypt’s funding gap as needed for the remainder of this year and for 2015."

During the fiscal year of 2013/14, Egypt recorded US$11.9 billion in grants received from Arab countries, of which $1 billion was from the United Arab Emirates, $2 billion from the Kingdom of Saudi Arabia and $7.6 billion in?kind grants from Gulf countries in the form of petroleum shipments, compared to US$0.8 billion last year.

"At the same time, we expect the GCC states to play a catalytic role to broaden support for Egypt to include multilateral institutions and other donor states" she added.

Dima pointed out that "in the case lower oil prices last beyond 2015, we expect that this may impact the readiness of GCC donor states to provide financial support to Egypt over the longer term."

EFG expects lower oil prices to prevail this year with the oil price averaging $85 per barrel in 4Q2014, and $101.5 for the year as a whole.

"Some guidance—including through OPEC production cuts next year – is likely to provide modest support, lifting the average oil price to $90 in 2015," EFG explained.

For more information about related Opportunities and Key Players visit Egypt Oil and Gas Projects


Norway >>  5/12/2022 - Neptune Energy announced its financial results for the three months ended 31 March 2022. ...
United Kingdom >>  5/12/2022 - - Corio Generation partners with Ontario Teachers’ Pension Plan to support the development of up to 9GW of offshore wind worldwide
- Ontario Teac...


United Kingdom >>  5/10/2022 - Neptune Energy has announced it will spend more than $1 billion(1) over the next five years securing energy supplies for the UK and speeding the trans...
Norway >>  5/9/2022 - We are pleased to have secured further investment into Dolphin Drilling from an oil and gas industry specialist, S.D. Standard ETC Plc.

Th...


United Kingdom >>  5/9/2022 - Lithium processing company Green Lithium has agreed terms with Trafigura, one of the world’s largest commodities trading companies, that will support ...
United States >>  5/5/2022 - GE Renewable Energy has announced a minority investment in COBOD International, the company providing the 3D printer used at the Bergen research facil...

Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 


Gulf Oil and Gas
Copyright © 2021 Universal Solutions All rights reserved. - Terms of Service - Privacy Policy.