Oil exports increased by 8.9% to pay off debts

Sources within the Petroleum Ministry said Monday that the ministry has increased exports of liquefied natural gas through the Damietta plant in the past year in order to generate hard currency and repay debts owed to foreign partners and suppliers.

This contradicts Prime Minister Hesham Qandil, who two days ago said: “We consume all our natural gas production, except 3/1000 that go to Jordan just for the upkeep of the export production line.”

The sources explained that the additional quantities came after exports to Israel and Jordan were halted due to the repeated explosions of the Arish pipeline and after many high-consumption fertilizer plants ceased production, both sources providing some 350 million cubic feet per day.

The latest report of the Cabinet’s Information and Decision Support Center said exports of natural gas and its derivatives in the first five months of this year were increased by 8.9 percent to US$964.4 million versus US$885.7 million during the same period of 2011, a surplus of US$78.7 million.

The report also said the increase in exports coincided with a decline in production from January to May 2012 by 1.59 percent, going down to 19,279 tons, compared to 19,591 tons during the same period of last year.

Meanwhile, domestic consumption went up by 6.89 percent, and electricity generated from natural gas by 1.3 percent.

The report was issued a few days after the Egyptian General Petroleum Corporation said it has payed LE24 billion in debts to foreign partners and suppliers, and another LE23 billion to settle bank loans, all from its own resources, without resorting to the Finance Ministry.

Egypt's daily production of natural gas has been relatively stable over the past three years, with nearly 6 billion cubic feet, of which 55 percent are allocated for electricity, 30 percent for export, 13 percent for factories, and less than three percent for households.

Edited translation from Al-Masry Al-Youm

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