Egypt, one of the largest energy consumers in Africa, has not stopped paying its foreign energy partners despite the ongoing conflict in Gaza, according to the CEO of Italy’s Eni.
Eni praises Egypt’s commitment
Eni, the largest foreign oil and gas producer in Egypt, said that the country was showing a positive attitude towards investors and protecting their interests. Eni’s CEO Claudio Descalzi told analysts in a conference call on Friday that Egypt was paying its dues in small instalments, even though it was facing a difficult situation due to the war in Gaza.
Egypt relies on gas imports from Israel to meet its domestic demand and to export liquefied natural gas (LNG) to Europe. However, the gas flow from Israel was disrupted by the Israeli-Palestinian conflict that started in October 2023 and lasted for more than two months. Israel had to shut down the production from the Tamar offshore gas field, operated by US giant Chevron, several times due to rocket attacks from Gaza.
Eni’s Chief Operating Officer for Natural Resources Guido Brusco said that the gas supply from Israel was reduced to minimal quantities before being halted completely on October 29. He added that Eni had seen three LNG cargoes in December and expected eight to ten cargoes in the coming months.
Eni reports strong performance
Eni, which operates the Zohr gas field, Egypt’s largest, reported a fourth-quarter adjusted net profit of 1.64 billion euros, beating analysts’ forecasts. The company attributed its strong performance to its gas and LNG division, which included a one-off arbitration.
The company said it did not expect any impact from arbitrations this year, and confirmed its plan to list its low-carbon unit Plenitude. Eni’s Chief Financial Officer said that the company would monitor the financial markets in 2024 and 2025 to find the right window of opportunity.
Egypt faces economic challenges
Egypt’s economy has been struggling with multiple crises even before the war on Gaza. The country has been dealing with a double-digit inflation, a depreciating local currency, and a mounting external debt that risks a default. The country has also turned to the International Monetary Fund to increase its rescue program.
The war on Gaza has also affected Egypt’s Suez Canal revenues, which have dropped by 40 percent due to the attacks by the Houthis in Bab El Mandeb since November 2023. The Suez Canal is a vital source of foreign currency for Egypt, as it connects the Mediterranean Sea with the Red Sea.
Egypt has been trying to diversify its energy sources and reduce its dependence on imports. The country has been investing in renewable energy projects, such as solar and wind farms, and exploring new oil and gas fields in the Mediterranean and the Western Desert.
Egypt hopes that its efforts to end the conflict and to boost its energy sector will help it overcome its economic challenges and improve its relations with its regional and international partners.
Source: ReutersÂ
