Kuwait Petroleum Corporation (KPC) will increase its exports of oil to Egypt from the current level of 65,000 bpd to 85,000 bpd
KPC will also increase the supply of diesel and jet fuel to 1.5mn tonnes a year, up from 860,000 tonnes.
Ali al-Omair, the oil minister of Kuwait, said this was an attempt to help Egypt reduce the strain on foreign exchange reserves and high government fuel subsidies. The contracts, signed with Egypt's General Petroleum Corporation, will last until the end of 2016 and has been based on global market prices, added KPC official Nasser al-Mudaf.
Sherif Ismal, the Egyptian oil minister, had earlier told Reuters, ”Egypt would need to import an additional US$1bn of petroleum products and secure significant natural gas supplies to meet energy needs for the summer.”
In addition to Kuwait's increased supply of oil, Egypt is also reliant on donations of gasoline and diesel from Gulf Arab states. Saudi Arabia, UAE and Kuwait have also given Egypt billions of US dollars in aid.
KPC stated that it would be willing to sign additional contracts with Egypt to supply cooking gas and fuel oil within the next two months — the prices of which would be based on global tariffs. Kuwait is also considering using Egyptian refineries to process Kuwaiti oil as well as using shipping facilities in the country, Mudaf said.
In July 2013, Kuwait pledged US$4bn to Egypt, with a US$2bn central bank deposit, a US$1bn grant and US$1bn in oil products. This, however, was different from oil supply contracts that Kuwait has had with Egypt for years and which were due for renewal, added reports.
