Egypt Secures Finances for Oil Refinery

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Researched by Industrial Info Resources (Sugar Land, Texas)--This month, the Egyptian Refinery Company (ERC) signed a loan of $2.6 billion to finance the second stage of the Mostorod oil refinery, which is in a development area in Mostorod, near Cairo. The company will invest $3.7 billion to construct this refinery unit, which will have a production capacity of 85,000 barrels per day (BBL/d), in addition to Euro-V grade diesel.

The company will sell its product to the Egyptian General Petroleum Company under a purchase agreement that is set at international price levels for 25 years. The builder expects construction to be completed in 2014.The unit will be in full operation, after testing, in 2015. ERC signed the engineering, procurement and construction lump-sum, turnkey contract with a consortium formed by GS Engineering and Construction Corporation (South Korea) and Mitsui (Japan) in 2007, but efforts to secure financing have delayed the project repeatedly

Egypt is pursuing plans to increase proven oil reserves and local crude supplies to domestic oil refineries. In March 2010, Atef Abdel-Sadek, the chairman of the Tharwa Oil Company, announced that Tharwa would be the first Egyptian company to invest in oil exploration and production in Egypt. The company has discovered new crude oil resources in the area, which stretches west of Esh-Elmlaha in the Eastern Desert. The first well started producing 1,300 BBL/d in February this year.

In July 2010, state-owned General Petroleum Company announced a new discovery at Alnobia, in the Amer region in the Gulf of Suez. Test results indicated a daily production rate in the first phase of the Amer 1 and 2 wells of about 2,000 BBL/d, rising to 10,000 BBL/d at the completion of the first phase. The resource reserve of the discovery is about 65 million barrels, as reported by Dr. Sheriff Soussh, the president of the General Petroleum Company. It is worth noting that this discovery will increase the current oil production for the company to 46,000 BBL/d.

Sameh Fahmi, the Egyptian Minister of Petroleum, pointed out that the petroleum sector encourages Egyptian companies in research and exploration for oil and gas after the acquisition of appropriate expertise, and provides intensive training that is based on the experience of the success achieved by some of these companies.

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