Egypt plans to keep all the natural gas produced at a giant field that Italy’s Eni found off its Mediterranean coast to itself, heightening competition among gas producers in the Middle East and Africa. On Sunday, Eni said the deep-water deposit in the Zohr Prospect in the Shorouk block may hold 30 trillion cubic feet of fuel, making it the biggest gas discovery in the Mediterranean Sea. “All the production will go to internal consumption,” said Hamdy Abdel Aziz, director of the Egyptian Petroleum Ministry’s information department. He said the field’s reserves can meet Egypt’s needs for more than ten years. On Tuesday, Eni said drilling operations in the Zohr field will commence in January 2016. [Bloomberg, 9/1/2015]
Standard & Poor’s says oil price slump to start affecting Saudi banks
The impact of lower oil prices will soon start to weigh on Saudi Arabia’s banks, which are likely to see bad loans edge higher by the end of the year, according to Standard & Poor’s (S&P). Lenders in the kingdom have so far managed to defy many analysts’ expectations by posting generally healthy results despite a sharp decline in oil prices. However, S&P pointed out that it usually takes a few quarters for asset quality issues to surface in a less resilient economy. “We now believe that through the end of this year we will begin to see credit losses picking up,” said Timucin Engin, a banking analyst at S&P. The ratings agency said historical data suggests a clear link between non-performing loans and oil prices. The link is likely to be reinforced if, as expected, the government begins to slow spending, pumping less money into the economy. Meanwhile, on Monday, Fitch Ratings revised the outlooks of four Saudi banks to negative from stable. [Reuters, 9/2/2015]
Eastern Libya struggles to attract oil buyers in row with Tripoli
Libya’s internationally recognized government in Tobruk is struggling to attract oil majors in a bid to control oil revenue due to foreign clients’ wariness over breaking with the established state energy firm in Tripoli in the east. The Tobruk government wants major firms to purchase contracts with its own officials instead officials from the Tripoli controlled National Oil Corporation (NOC). Tobruk has escalated the dispute over Libya’s oil to put pressure on the rival government in Tripoli to agree on a national unity government, according to oil insiders and entrepreneurs. The central bank in Tripoli, which has tried to stay out of the struggle, says it serves the whole country. However life in the east has become harder as fighting disrupts deliveries of central bank banknotes and imports of food and petrol. [Reuters, 9/2/2015]
Iraq poised to meet investors ahead of crucial bond sale
Iraq plans to begin marketing a new Eurobond after September 7, according to several sources. Representatives from the country are expected to meet investors across the United States and Europe ahead of the deal. Citigroup, Deutsche Bank, and JPMorgan will be the lead managers, the sources said. Iraq is seeking to raise up to $6 billion through bond sales to relieve the pressure of low oil prices on state finances, though sources indicate this first deal will be small. Iraq last issued an international bond in January 2006. [Reuters, 9/2/2015]
Also of interest
Saudi firms court investors at US-Saudi investment forum in Washington | Al Bawaba
Saudi Khurais oilfield expansion delayed, start-up date unclear | Reuters
UAE’s Arabtec says no progress on Egypt housing project | Reuters
Egypt picks winners in tender for four LNG cargoes via Jordan | Reuters
Eastern Libyan state oil firm AGOCO producing 225,000 bpd | Reuters
Turkish lira weakens as Iraq kidnappings add to security worries | Reuters