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Plans to up energy production⚡

Egypt wants to expand gas output by 30% by 2025

The Egyptian government is looking to up gas production by 30% from current daily rates to reach 6 billion by the end of next year, a government source told Asharq.

This comes as the country wrestles with LNG shortages after becoming a net importer.

Egypt’s demand for the resource totals some 6.2 billion cubic feet a day, while it only produces about 4.2 billion.

A lot of agreements in the works.

Last month, the Managing Director of the Egyptian Natural Gas Holding Company noted that 11 new agreements were signed with international companies for natural gas exploration, production, and development during FY 2023-24 with a minimum total investment of USD 925 million.

British Oil giant BP reportedly plans to pump USD 400 million during the current fiscal year to drill two new wells in its North Alexandria concession. The wells would add a combined daily 400 mn cubic feet of gas to its output.

And earlier this month, American oil giant Chevron said it will invest USD 150 million to drill an exploratory well — dubbed “Singer” —- in the Mediterranean Sea next month as part of its plan to expand its natural gas output in Egypt, a government official told Asharq.

The government has been clearing its debts to encourage new investments:

In September, the government reportedly repaid USD 1.2 billion of its arrears to foreign oil and gas players. After last month’s payment, the government has USD 2 billion left to pay this fiscal year.

Egypt could save up to USD 400 million from the IMF's decision to cut surcharges

A recent decision by the International Monetary Fund’s Executive Board to reduce borrowing costs for its member countries by 36% could see Egypt save between USD 300-400 million, a government source told Enterprise.

Background:

The IMF charges interest similar to other lenders. In addition to the interest, it levies surcharges (extra fees) on members who draw substantial loans or ones who delay repayments.

The additional charges were instituted to help accumulate reserves to protect against financial risks and provide incentives for prudent borrowing.

The IMF’s adjusted policy will see it lower the surcharges it levies and raise the amount and duration thresholds for its loans.

Why this matters:

Egypt is among the countries paying the highest surcharges to the fund alongside Ukraine, Argentina, Ecuador and Pakistan, Reuters writes, citing research from Boston University’s Global Development Policy Center.

Prior to the policy adjustment, Egypt was forecast to pay the IMF USD 646 million in surcharges between 2024- 2028, Enterprise notes, citing data by the Center for Economic and Policy Research.

Atlas and Better Home ink final contract for EGP 5 billion project

Atlas for Investment and Food Industries’ board signed a development contract in partnership with Better Home Real Estate Investment on a real estate project — in which Atlas will hold a 33% share — that is expected to generate revenues of EGP 5.2 billion.

Atlas had a rough 1H:

Atlas recorded a net loss of EGP 694.42 thousand during the six months ending in June. It raised its revenues 29.6% YoY to EGP 25.01 million.

But there are plans to acquire a majority stake in the company:

The Financial Regulatory Authority (FRA) noted late last month that Amoun for Real Estate and Tourism submitted a mandatory tender offer (MTO) to snap up a 65.59% stake in Atlas.

Per the offer, Amoun must purchase at least 51% of the target company with a maximum acquisition cap of 90%.

Value of the potential transaction:

Amoun is planning to buy approximately 427.2 million shares of Atlas at EGP 0.78 per share, valuing the company at approximately EGP 333.221 million.