EconSource: Italy’s Eni Makes Mega Gas Discovery Off Egyptian Coast

Italian energy group Eni said on Sunday that it discovered the largest known gas field in the Mediterranean off the Egyptian coast, predicting the find could help meet Egypt’s gas needs for decades to come. The Italian major said in a statement the offshore “Zohr” field could hold 30 trillion cubic feet of gas, covering an area of about 100 square kilometres. Eni said it plans to fast track development of the site using existing infrastructure and that more gas could be uncovered in future drilling. Eni CEO Claudio Descalzi said it would take several months to sort out the development and production leases and expects to begin drilling early next year. If drilling starts in early 2016, production would likely kick off about a year later, based on similar projects. Descalzi said that Eni has not ruled out selling a stake in the Zohr field. Descalzi met with Egyptian President Abdel Fattah al-Sisi on Saturday to discuss the find. [Reuters, Ahram Online, FT, AFP, WSJ, BBC, 8/30/3025]

Saudi Arabia to provide $2.9 billion to Egypt; Sisi to sign business deals with China
Egypt will receive financial assistance and soft loans from Saudi Arabia worth $2.9 billion, according to unnamed sources. The agreements will be signed on September 7 and Saudi King Salman will attend the meetings. The financial packages include $750 million for development projects in Egypt, $750 million for a program to support exports, and $1.4 billion to buy petroleum products. An Egyptian delegation headed by President Abdel Fattah al-Sisi is scheduled to sign several business agreements with China during his visit to the country on Tuesday. Minister of Industry and Foreign Trade Mounir Fakhry Abdel Nour said the China Development Bank will provide the National Bank of Egypt with a loan of $100 million to finance small and medium sized enterprises. In addition, China’s Ministry of Commerce will provide Egypt a grant of $30 million for remote satellite sensing equipment. [Egypt Independent, Al Mal (Arabic), 8/30/2015]

Libya posts deficit of $3.3 billion in 2015
Libya posted a budget deficit of 4.5 billion dinars ($3.3 billion) in the first seven months of 2015, as oil production fell and oil prices weakened, the Tripoli-based central bank said. Libya is producing less than 400,000 barrels per day of oil, a quarter of what it pumped before 2011. State income, generated by oil and gas exports, was 12.4 billion Libyan dinars until the end of July, leaving a deficit of 4.5 billion dinars to cover expenditures of 16.9 billion dinars. The bank froze development projects and brought down the public wage bill to 9.7 billion dinars in the first seven months of 2015. The head of the Tripoli-based National Oil Company (NOC) and Central Bank chairmen are meeting with oil majors in London in an effort to prevent the rival eastern-based NOC from attracting clients. [Reuters, 8/30/2015]

Algeria to cut spending by 9 percent next year over oil price slump
Algeria said on Saturday that it will cut spending by 9 percent next year due to the fall in global oil prices and a drop in energy revenues. The government had already announced a 1.3 percent cut in this year’s budget after it said the fall in world crude prices would slash its energy earnings by 50 percent. “We need courageous decisions for 2016, so we have decided on a 9 percent cut in the budget,” Prime Minister Abdelmalek Sellal told a meeting of local government officials. “We need to reduce the number of big infrastructure projects, but we need to continue with those we have already launched,” he added. Sellal said the 2016 cutbacks would not impact housing, health, or education and that the government still expects economy to grow 4.6 percent in 2016. [Reuters, 8/29/2015]

Turkey’s central bank unveils measures to boost liquidity
Turkey’s central bank on Saturday unveiled measures to bolster liquidity and help the country’s commercial banks meet debt repayments. The bank said it would raise interest rates paid on mandatory lira reserves that commercial lenders park at the national bank by a total 1.5 percentage points in three installments on September 1, October 1, and December 1 to help support core financial obligations. The bank also more than doubled the cap on its foreign-exchange transactions with Turkish banks to $50 billion to boost liquidity and help local lenders repay international borrowings. In addition, the bank said it increased mandatory reserve requirements on short-term Islamic-law compliant participation funds and foreign-exchange liabilities other than deposits. [WSJ, 8/29/2015]

Also of interest
Saudi credit default swaps fall sharply on oil price recovery | Reuters
Rising oil output boosts Saudi economic growth | Reuters
Saudi stocks drop on oil, Egypt jumps after gas find | Reuters
Gulf markets fall after oil pulls back | Reuters
Fitch affirms Qatar at ‘AA’ rating | Gulf News
Egypt money supply up 16.5 percent in July | Reuters
Egypt oil spill covers nearly a mile of Nile River | AP
Egyptians wary of future as signs of global economic slowdown grow | Ahram Online
IMF mission to visit Egypt in September | Al Borsa (Arabic)
Eastern Libyan oil firm postpones Dubai conference to discuss contracts | Reuters
Morocco’s tourism revenues increase by 16 percent in July | Morocco World News
Turkish exports see worst July since 2010 | Bloomberg