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Cairo hopes that by 2020 it will obtain energy independence, outlining its vision in its latest five-year strategy announced last month by Oil Minister Tariq al-Mulla but more pressing for Egypt is how it will cope with its current challenges. Luckily for Cairo, Saudi Arabia, the UAE and Kuwait have been on hand to lend their support since the 2013 ouster of former president Muhammad Mursi. But whether Cairo’s Gulf backers can or will continue their largesse in the face of a 60%-plus slump in their oil revenues remains to be seen.
As a net importer of oil and gas (LNG), Egypt in theory benefits from lower prices. But any gains have been wiped out by a collapse in the country’s domestic gas output to a 10-year low of 4.07bn cfd in December from over 6bn cfd four years earlier, when the country was still a net exporter (see graph 1). Foreign reserves at just $16.5bn are less than half the $36bn end-2010 level (see graph 2).
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