EconSource: Russia’s Rosneft Signs LNG Deal With Egypt’s EGAS

Russia’s state-owned oil company Rosneft signed a deal with Egypt’s state-owned Egyptian Natural Gas Holding Company (EGAS) on Thursday to supply Egypt with liquefied natural gas (LNG). The deal came during President Abdel Fattah al-Sisi’s visit to Russia. EGAS announced that Rosneft would supply Egypt with twenty-four shipments of LNG over a two-year period beginning October 2015. Rosneft and Egypt’s Petroleum Ministry also signed a declaration to create scholarships for Egyptian nationals to study at Russian universities. A statement from the Russian company said the deals “will allow Rosneft to access the high growth potential Egyptian gas market and deepen broader cooperation between the two companies.” [Mada Masr, Cairo Post, 8/27/2015]

Egypt’s power choices appease public, squeeze industry
Government energy policies focused on appeasing the public are dealing a blow to vital industries in Egypt. Companies say production will continue to suffer unless the government starts diverting some of the gas supplied to electricity plants powering homes to factories. Research group Capital Economics estimates manufacturing output contracted by almost 30 percent year-on-year in June due to foreign exchange restrictions and gas shortages. Ezz Steel, Egypt’s largest steelmaker, last week reported a sevenfold year-on-year increase in its net loss for the first quarter of the year. Losses were “principally due to constant disruption of utilities and lack of natural gas,” the company said. The head of Egypt’s Cement Producers Association, Madhat Stefanos, said the sector had lost about 40 percent of its capacity due to energy shortages last year. [Reuters, 8/27/2015]

Saudi foreign reserves fall slows in July after bond sale
The decline in Saudi Arabia’s foreign reserves slowed in July after the government began issuing domestic debt to cover part of a budget deficit caused by low oil prices. Net foreign assets at the central bank have been sliding since they reached a $737 billion peak last August. The latest data showed net foreign assets shrank only 0.5 percent from the previous month to $661 billion in July, their lowest level since early 2013. They had dropped 1.2 percent month-on-month in June and at faster rates earlier this year. Early this year, the central bank drew down its foreign bank deposits, but July data showed that the bank changed its strategy in the last two months, rebuilding its foreign deposits while selling foreign securities more actively. [Reuters, 8/27/2015]

Central bank says Tunisia’s economy in technical recession
Tunisia’s economic growth was limited to 0.7 percent in the second quarter of 2015, against 1.7 percent in the previous quarter and 2 percent in the same period last year. Tunisia’s Gross Domestic Product (GDP) dropped 0.7 percent in the second quarter of 2015 after a 0.2 percent decrease in the first quarter. According to the Central Bank of Tunisia, this confirms the Tunisian economy’s entry into a technical recession. This slowdown is mainly due to the decline in value added in industry, particularly manufacturing industries and market services. At the sector level, the general index of industrial production posted a decline of 1.4 percent at the end of May 2015. The latest indicators available on activity in the industrial sector in July 2015 show a fall in the import of raw materials, semi-finished products, and capital goods. [All Africa/TAP, 8/27/2015]

Middle East faces water shortages for the next twenty-five years, study says
Water supplies across the Middle East will deteriorate over twenty-five years, threatening economic growth and national security and forcing more people to move to already overcrowded cities, a new study by the World Resources Institute (WRI) finds. New WRI rankings place fourteen of the world’s thirty-three most water-stressed countries in the Middle East and North Africa region. Companies, farms, and residents in these countries are all highly vulnerable to the slightest change in supplies, according to the study. “Rapidly growing populations will drive increased consumption by people, farms, and companies. More people will move to cities, further straining supplies. An emerging middle class could clamor for more water-intensive food production and electricity generation,” the study says. [The Guardian, 8/27/2015]

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