Egypt aspires to a joint company with Iraq to work on oil and gas projects
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Economy News _ Baghdad
Egypt is seeking to establish an Egyptian-Iraqi partnership to work in the field of project implementation to speed up facilitating the entry of Egyptian companies to work in oil and gas projects in Iraq, after Cairo extended the validity of its agreement with Baghdad to import 12 million barrels of Iraqi crude oil for a period of 6 months.
The Egyptian Minister of Petroleum and Mineral Resources, Tariq Al-Mulla, said that the Egyptian oil sector is ready to strengthen the presence of its companies in Iraq in the coming period, with various activities of oil, gas and petrochemicals, especially that the companies establishing oil projects and maintenance have a successful work record that extends and a great experience in working inside Iraq.
The Egyptian minister announced during his meeting with the ambassador of the Republic of Iraq to Cairo, its permanent representative to the League of Arab States, Ahmed Nayef al-Dulaimi, on August 17th, about the possibility of establishing a joint Egyptian-Iraqi company in the field of project implementation in Baghdad, especially after the continuation of the agreement to supply Iraqi crude For Egypt, about 12 million barrels for a new 6-month period, which has been regularly renewed since 2014.
The Baghdad-Cairo oil supply agreement goes back to an agreement signed in April 2016 to supply about 12 million barrels of crude oil, at a rate of 2 million barrels per shipment, for a period of one year, subject to renewal, with a grace period of about 90 days before payment, provided that Iraqi oil is repeated in Egyptian refineries. When the Egyptian government signed a trade contract with the Iraqi SOMO to supply Basra Light crude oil. Cairo received the first shipments of Iraqi oil in May 2017, after the signed agreement that the contract would be renewed annually.
The Iraqi ambassador to Cairo said that his country is keen to support bilateral relations and openness to Egypt, stressing the importance of seeking help from the distinguished Egyptian expertise, especially in the field of energy.
Al-Dulaimi explained that Iraq seeks a strong presence of Egyptian companies, especially companies implementing oil and gas infrastructure projects and electrical connectivity.
Hamdi Abdel Aziz, the official spokesman for the Egyptian Ministry of Petroleum, said that Egypt's annual oil production only meets about 60 percent of the local market's needs, stressing that the ministry imports the rest from abroad to meet market needs.
He added that his ministry aims to reach the volume of Egypt's production of oil and condensates to more than 700 thousand barrels per day by the end of this year, revealing that a new agreement has been signed with an Arab country similar to the agreement with Iraq, refusing to disclose the name of the country at the present time.
Osama Kamal, the former Egyptian Minister of Petroleum, confirmed that the commercial rapprochement between Cairo and Baghdad has been clear for a long time, especially with Iraq's importing large quantities of Egyptian liquefied gas, which facilitates the exchange process between the two countries and the import of Iraqi crude.
He pointed out that what strengthens the Egyptian-Iraqi agreement is the presence of a pipeline between Iraq and Jordan, which helps import crude from them, by connecting the lines, and transporting materials through them, as they are better and less expensive than shipments.
He added that Iraq is also seeking the Arab electrical connection through an agreement with Saudi Arabia to link them, provided that it benefits from the existing connection between Egypt and Saudi Arabia to supply Iraq with electric power.
Dr. Gamal Qalioubi, a professor of energy and petroleum at the American University, said in press statements that there is already an existing partnership between Egypt and Iraq through the development of their own fields.
He added that Cairo contributes about 15 percent to operating the Iraqi (Faiha) field, to develop it and increase production in it, in addition to the contribution of a number of Egyptian companies such as Enppi in developing the oil infrastructure in Iraq.