Suez industrial zone to attract $7bn in investments: Russian envoy

This picture taken on July 9, 2019 shows tankers and cargo ships navigating through the Great Bitter Lake in the Suez Canal southwards towards the Egyptian port city of Suez. (AFP)
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Updated 24 August 2020

Suez industrial zone to attract $7bn in investments: Russian envoy

  • Borisenko said Russian companies are interested in increasing cooperation with Egyptian businessmen in the local market, which he described as very attractive for investment

CAIRO: The industrial zone that Russia is establishing in the Suez Canal Economic Zone is expected to attract $7 billion in new investments, said Moscow’s ambassador to Egypt.
Georgy Borisenko indicated interest from Russian companies to invest in the industrial zone, which according to Egyptian government data will cover an area of 5.25 sq. km and provide 35,000 direct and indirect job opportunities, 90 percent of which will be filled by Egyptians.
Implementation of the project will take 12 years with a 50-year usufruct agreement. Financing comes from the Russian Export Center and the Russian Central Bank.
The zone will enjoy special advantages regarding taxes and customs duties on exports and imports, labor costs and fees for passage from the Suez Canal, with the possibility of transferring all of the revenues and profits abroad without requiring an Egyptian partner.
Borisenko said trade between the two countries reached $6.2 billion in 2019, making Russia one of Egypt’s top 10 trade partners.
He added that the most important Russian exports to Egypt are wheat, minerals, oil, gas, cars, railroad cars, timber, fats and oils, while Egyptian exports to his country include agricultural products, food and chemicals.
Major Russian companies — including oil companies Rosneft and Lukoil, and automobile company Lada — operate in Egypt, Borisenko said.
There are many joint projects that constitute a strong incentive to support economic cooperation, he added.
Russia’s Transmashholding has started supplying Egypt’s railway sector with 1,300 railroad cars.
Borisenko said Russian companies are interested in increasing cooperation with Egyptian businessmen in the local market, which he described as very attractive for investment.
He said Russian direct investments in Egypt have increased in the past few years, and there is hope for increasing the volume of these investments, especially in the fields of oil and gas discovery, agriculture, food industries and mechanical engineering.

 


Oil world tries to read Chinese post-pandemic demand

Updated 25 October 2020

Oil world tries to read Chinese post-pandemic demand

  • The economic outlook for Asia will help decide some pretty pressing short-term policy issues
  • China’s refineries are getting back in top gear, and are looking to increase crude purchases in anticipation of economic recovery

DUBAI: While all eyes are on the US presidential election, the energy sector is keeping a watchful scrutiny on what is happening on the other side of the world, in China and the rest of Asia. Who the Americans choose will of course have enormous influence on energy policy for years to come, not least because Donald Trump versus Joe Biden is, in many ways, a runoff between the traditional oil and gas industry and the alternative renewable future.

But policymakers in the Middle East and in the broader OPEC+ alliance led by Saudi Arabia and Russia are looking eastward to determine more immediate priorities. The economic outlook for Asia, and of China in particular, will help decide some pretty pressing short-term policy issues.

At what official selling price should big producers such as Saudi Aramco and Adnoc mark their exports to China in the coming weeks? What stance should OPEC+ take toward compliance and compensation for the rest of this year? And, crucially, should it press ahead with plans to put an extra 2 million barrels per day (bpd) of oil on global markets in January, as the historic April cuts deal envisaged?

An added variable has been thrown into the works with higher-than-expected output from Libya, which has resumed production and exports from its war-torn facilities and could, according to some energy experts, be producing another 1 million barrels by the end of the year.

That is hardly a deluge of crude by global standards, in a world that consumes above 90 million bpd, though it is enough to complicate the already-delicate calculations of OPEC+ analysts.

But the big imponderable is China. The country blew hot and cold on oil imports since the April crisis, snapping up cheap oil one month and easing back on imports the next. It was hard to read the signals coming out of China.

Were the pauses in imports due to a slower rate of recovery from the pandemic economic lockdowns? Or was China simply chock-full of crude, to the extent that it had filled its strategic reserve and had nowhere else to store it?

Evidence of the latter came in the form of the flotilla of crude tankers waiting to unload off the coast of the Shandong oil terminal. At one stage, there were as many as 60 million barrels afloat awaiting discharge off China’s coast.

The people who make a living from tracking these things say that there has recently been evidence of a slow unloading from these ships, but that there is still an awful lot of crude afloat, waiting to come onshore.

There have also been signs that China’s refineries are getting back in top gear, and are looking to increase crude purchases in anticipation of economic recovery. One of the biggest, Rongsheng Petrochemical, recently snapped up 7 million barrels through Singapore, in a move taken by some to be the starting gun on an aggressive Chinese buying spree.

The economic logic suggests that if that is going to happen, it will take place pretty soon. According to the International Monetary Fund’s latest review, China — the only major economy forecast to grow in 2020, with 1.9 percent growth — will soar to 8.2 percent expansion next year. The country’s early and rigorous lockdown, and high levels of economic stimulus since then, are clearly paying off.

Whether the Chinese lift-off comes in time to affect OPEC+ calculations over the planned January increase remains to be seen. From where oil policymakers are looking at it at the moment, it looks like a good bet that China, at least, will need plenty of crude next year to fuel its post-pandemic recovery.