Reuters/Dubai


The collapse in oil prices could prolong the efforts of UAE-based Dana Gas to recover overdue receivables from Egypt, its chief  executive said yesterday.
Egypt, which has fallen behind on oil payments during four years of political instability, signed a deal with Dana in September

allocating the company additional condensate production that it could sell on the international market, to offset the debt.
Chief executive Patrick Allman-Ward told reporters in Dubai that the amount owed had fallen to around $160mn, from $280mn in

September, and that he hoped to clear the debt by mid-2018.
But he also said that the oil price fall could prolong the process. Benchmark Brent crude prices have fallen by half since the

end of September to below $47 a barrel.
“Clearly our calculations were based at $85, which we thought at the time was a very conservative assumption - clearly we are not

there at the moment,” he said.
He said he believed that oil prices would rebound to above $80 a barrel in nine to 18 months.
“It is going to take us six months anyway to start seeing significant volumes of liquid production hitting our production

profiles, so hopefully by that time the oil price will be in a better place,” he said. “It will impact but it will not have a

particularly significant or severe impact.”
Allman-Ward said Dana was still receiving $2.65 per million British thermal units (mmBtu) for gas, and that there was a provision

in the concession agreement to increase this price if it was not commercially viable.
“We are in discussions with the Egyptian government to see if we can come to an agreement to make (it) economically viable,” he

said yesterday, adding several options are being discussed including either raising the fixed price or link it to prices on the

international market.
Dana has been in talks with the Egyptian government to secure a higher price for some of the natural gas it extracts since

November.
Cairo is also negotiating increased gas prices with other energy firms including Italy’s Eni and Germany’s RWE DEA, particularly

in cases where prices are not high enough to cover the costs of production.
Egypt’s Oil Ministry said in November it hoped to repay the $4.9bn it owed to foreign oil and gas companies by May.

‘Egypt considers gas imports from Israel’

Reuters/Cairo


Egypt is open to importing gas from Israel, its oil minister said in state-owned media yesterday, another sign that it may lean

on its neighbour to help tackle its energy troubles.
Egypt is going through its worst energy crisis in decades and is seeking fresh sources of natural gas, which powers most of its

homes and factories, including Algeria, Russia, and Cyprus.
But importing gas from Israel is more controversial. Popular mistrust of the Jewish state runs high following three wars with

Egypt and its continuing occupation of the Palestinian land. Oil Minister Sharif Ismail said gas imports from Israel were a

possibility, when asked in an interview by the state-owned Al Mussawar magazine.
“Anything can happen. Whatever achieves the best interests of Egypt, and of the Egyptian economy and the role of Egypt in the

region... That will determine the decision to import gas from Israel,” he said.
Companies are already negotiating to bring Israeli gas to Egypt, but any deals will hinge on approval from Cairo.  Egypt became

the first Arab country to sign a peace treaty with Israel in 1979, following three decades of intermittent conflict since

Israel’s creation in 1948.
While many Egyptians still view Israel with suspicion, relations have improved since the army toppled former president Mohamed

Mursi, an Islamist, in 2013 after mass protests against his rule.
The two countries also have a shared interest in maintaining stability in the Sinai Peninsula where security has deteriorated

since Mursi’s ouster.
Egypt, which once exported gas to Israel and elsewhere, has become a net energy importer over the last few years.
The government has attempted to improve the energy landscape by slashing subsidies, paying down its debt to foreign energy firms,

and negotiating import agreements.
The operators of Israel’s offshore Tamar gas field said they had plans to build a pipeline to Egypt’s liquefied natural gas (LNG)

plant in the north-eastern port of Damietta, run by a joint venture of Spain’s Gas Natural and Italy’s Eni. Israel’s Delek

Drilling, one of the operating partners, said in November that if an agreement is signed, gas supplies to Egypt could start

flowing in 2017.