Kuwait In Talks To Renew Contracts On Supplying Oil To Egypt

Kuwait is in talks to renew some of its contracts to supply oil to Egypt and has been looking for potential investments in the energy sector there, the Gulf state’s oil minister said on Monday.

Egypt has been relying on crude deliveries from the Kuwaiti government at favourable terms as well as on donations of gasoline and diesel from Gulf Arab states to help reduce the drain on its foreign exchange reserves and the heavy costs of government fuel subsidies.

Kuwait’s al-Seyassah newspaper reported on Sunday that Kuwaiti and Egyptian officials were due to meet to agree on details of supply contracts.

The newspaper said Kuwait would supply 2.25 million barrels of oil and 1.2 million tonnes of petroleum products per month from the beginning of May next year.

Asked about the reported meeting, Kuwaiti Oil Minister Ali al-Omair said: “It is actually for the renewal of some of the contracts, which need to be renewed, and to look if there are any chances for investment in Egypt regarding the oil sector.”

Speaking on the sidelines of an oil conference, Omair said the two sides discussed renewing the oil supply contracts but no decision has been taken so far.

“This is of course a long-term decision. Some of them will be renewed, some of them will not renewed nowadays, but we have to look for the future,” he said, without giving more details.

Egyptian Oil Minister Sherif Ismail told Reuters in February that Egypt would need to import an additional $1 billion worth of petroleum products and secure significant natural gas supplies as it scrambles to meet energy needs for the summer.

The Gulf Arab states of Saudi Arabia, United Arab Emirates and Kuwait, wary of Egypt’s Muslim Brotherhood, gave Egypt billions of dollars in aid, including oil, after the ousting of Islamist president Mohamed Mursi.

In July last year Kuwait pledged $4 billion to Egypt, with a $2 billion central bank deposit, a $1 billion grant and $1 billion in oil products. This was separate from the oil supply contracts.