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Saudi Aramco to resume oil product shipments to Egypt soon

Reuters  |  CAIRO 

By Ehab Farouk and Eric Knecht

CAIRO (Reuters) - Arabian state company Aramco will resume product shipments to some six months after halting them suddenly, the Egyptian Petroleum Ministry said on Wednesday, signalling a potential thaw in relations after months of tension.

The ministry said in a statement that it was working with Aramco on a timetable for the resumption of shipments and that the reasons behind the October cut-off were purely commercial.

"It was agreed that the Arabian side would resume Aramco's shipping of products as per the commercial contract signed between the Egyptian General Petroleum Corporation and Aramco," the statement said.

Aramco could not be reached for immediate comment.

"Very shortly we will finalise the time and place for receiving shipments from Aramco," a ministry official told Reuters, asking not to be identified because he is not authorised to speak to the media.

Asked if shipments would resume within weeks, the official said: "No, no, we are talking about a very short time period."

Arabia agreed in April last year to provide with 700,000 tonnes of refined products a month for five years, but the cargoes stopped arriving in early October.

Aramco did not provide official reasons for the halt.

"According to Aramco, the postponement of shipments was due to commercial conditions on its part amidst changes in global market prices and Arabia's reduced production levels, as well as routine maintenance to refineries," the Egyptian Petroleum Ministry's statement said.

Though officials from both sides have denied the existence of tensions or disagreements between the North African nation and the Arab world's most populous and richest state, the two countries have been at odds on a number of political issues.

voted in favour of a Russian-backed but Saudi-opposed U.N. resolution on Syria in October, which excluded calls to stop bombing Aleppo. Then in January an Egyptian court rejected a government plan to transfer two uninhabited Red Sea islands to Arabia

"Politically it is a very positive step," Pharos Holding energy analyst Karim Ezzat said of the resumption of product shipments.

"It's not the nominal amount that you get as such, but really the investments, the backing, the political backing, that is the more important side."

had turned to the spot market in recent months but also sought similar deals to make up the shortfall. Crude from Iraq is expected to arrive in late March as part of an agreement for 1 million barrels a month.

Still, said Ezzat, the Aramco deal which includes a low 2 percent interest rate to be repaid over 15 years, was difficult to match at a time of low prices and fiscal belt-tightening.

(Additional reporting by Reem Shamseddine in Khobar; Writing by Ahmed Aboulenein; Editing by David Clarke and David Goodman)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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Saudi Aramco to resume oil product shipments to Egypt soon

CAIRO (Reuters) - Saudi Arabian state oil company Aramco will resume oil product shipments to Egypt some six months after halting them suddenly, the Egyptian Petroleum Ministry said on Wednesday, signalling a potential thaw in relations after months of tension.

By Ehab Farouk and Eric Knecht

CAIRO (Reuters) - Arabian state company Aramco will resume product shipments to some six months after halting them suddenly, the Egyptian Petroleum Ministry said on Wednesday, signalling a potential thaw in relations after months of tension.

The ministry said in a statement that it was working with Aramco on a timetable for the resumption of shipments and that the reasons behind the October cut-off were purely commercial.

"It was agreed that the Arabian side would resume Aramco's shipping of products as per the commercial contract signed between the Egyptian General Petroleum Corporation and Aramco," the statement said.

Aramco could not be reached for immediate comment.

"Very shortly we will finalise the time and place for receiving shipments from Aramco," a ministry official told Reuters, asking not to be identified because he is not authorised to speak to the media.

Asked if shipments would resume within weeks, the official said: "No, no, we are talking about a very short time period."

Arabia agreed in April last year to provide with 700,000 tonnes of refined products a month for five years, but the cargoes stopped arriving in early October.

Aramco did not provide official reasons for the halt.

"According to Aramco, the postponement of shipments was due to commercial conditions on its part amidst changes in global market prices and Arabia's reduced production levels, as well as routine maintenance to refineries," the Egyptian Petroleum Ministry's statement said.

Though officials from both sides have denied the existence of tensions or disagreements between the North African nation and the Arab world's most populous and richest state, the two countries have been at odds on a number of political issues.

voted in favour of a Russian-backed but Saudi-opposed U.N. resolution on Syria in October, which excluded calls to stop bombing Aleppo. Then in January an Egyptian court rejected a government plan to transfer two uninhabited Red Sea islands to Arabia

"Politically it is a very positive step," Pharos Holding energy analyst Karim Ezzat said of the resumption of product shipments.

"It's not the nominal amount that you get as such, but really the investments, the backing, the political backing, that is the more important side."

had turned to the spot market in recent months but also sought similar deals to make up the shortfall. Crude from Iraq is expected to arrive in late March as part of an agreement for 1 million barrels a month.

Still, said Ezzat, the Aramco deal which includes a low 2 percent interest rate to be repaid over 15 years, was difficult to match at a time of low prices and fiscal belt-tightening.

(Additional reporting by Reem Shamseddine in Khobar; Writing by Ahmed Aboulenein; Editing by David Clarke and David Goodman)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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Business Standard
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Saudi Aramco to resume oil product shipments to Egypt soon

By Ehab Farouk and Eric Knecht

CAIRO (Reuters) - Arabian state company Aramco will resume product shipments to some six months after halting them suddenly, the Egyptian Petroleum Ministry said on Wednesday, signalling a potential thaw in relations after months of tension.

The ministry said in a statement that it was working with Aramco on a timetable for the resumption of shipments and that the reasons behind the October cut-off were purely commercial.

"It was agreed that the Arabian side would resume Aramco's shipping of products as per the commercial contract signed between the Egyptian General Petroleum Corporation and Aramco," the statement said.

Aramco could not be reached for immediate comment.

"Very shortly we will finalise the time and place for receiving shipments from Aramco," a ministry official told Reuters, asking not to be identified because he is not authorised to speak to the media.

Asked if shipments would resume within weeks, the official said: "No, no, we are talking about a very short time period."

Arabia agreed in April last year to provide with 700,000 tonnes of refined products a month for five years, but the cargoes stopped arriving in early October.

Aramco did not provide official reasons for the halt.

"According to Aramco, the postponement of shipments was due to commercial conditions on its part amidst changes in global market prices and Arabia's reduced production levels, as well as routine maintenance to refineries," the Egyptian Petroleum Ministry's statement said.

Though officials from both sides have denied the existence of tensions or disagreements between the North African nation and the Arab world's most populous and richest state, the two countries have been at odds on a number of political issues.

voted in favour of a Russian-backed but Saudi-opposed U.N. resolution on Syria in October, which excluded calls to stop bombing Aleppo. Then in January an Egyptian court rejected a government plan to transfer two uninhabited Red Sea islands to Arabia

"Politically it is a very positive step," Pharos Holding energy analyst Karim Ezzat said of the resumption of product shipments.

"It's not the nominal amount that you get as such, but really the investments, the backing, the political backing, that is the more important side."

had turned to the spot market in recent months but also sought similar deals to make up the shortfall. Crude from Iraq is expected to arrive in late March as part of an agreement for 1 million barrels a month.

Still, said Ezzat, the Aramco deal which includes a low 2 percent interest rate to be repaid over 15 years, was difficult to match at a time of low prices and fiscal belt-tightening.

(Additional reporting by Reem Shamseddine in Khobar; Writing by Ahmed Aboulenein; Editing by David Clarke and David Goodman)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

image
Business Standard
177 22