Egypt’s gas output slumped to 5.54bn cfd for March, the lowest in almost two years and a whopping 1.3bn cfd (19%) down on the record 6.83bn cfd set just three months earlier in December 2019. This comes as Cairo has ordered the country’s key producers such as Eni, BP and Shell to deliberately curtail output (MEES, 10 April).
Whilst this ostensibly appears to mesh with the majors’ current policy of slashing spending (MEES, 15 May & MEES, 27 March), the interests of the IOCs and Egypt are not aligned. Cairo is contractually obliged to buy the gas at a fixed price, typically around $4/mn BTU for Mediterranean offshore and Nile Delta output. But, with the domestic market more than sated, it has been left to sell surplus volumes on the international spot LNG market where current prices all but guarantee it a hefty loss. As a result of output shut-ins, exports fell from a six-year high of 1.02mn cfd in November to just 253mn cfd for February, the latest data shows. (CONTINUED - 344 WORDS)