CAIRO: Egyptian government sources said last week Egypt will honor its commitments according to the joint oil exploration agreements signed with Cyprus despite Turkey’s announced intentions to offer international tenders for exploration blocks in the same areas.
The Turkish Government had announced last week through the state’s Anatolia News Agency it intends to offer tenders for oil exploration in the Eastern Mediterranean, where the Cypriot Government is working with Lebanon and Egypt on exploration, by the end of the month for project implementation to begin in July or August, 2007.
In January, Turkey objected to bilateral exploration deals between Cyprus and Egypt and Lebanon as news began to surface about the imminent launch of oil exploration projects off the coasts of Cyprus, the northern third of which has been claimed by Turkey since 1974 in defiance to the United Nations. Turkish Cypriot leader Mehmet Ali Talat said his government has the right to potentially large oil reserves off its coast.
In February, Cypriot President Tassos Papadopoulos said he had been assured by Egypt and Lebanon work will proceed on the joint offering of exploration blocks despite Turkish objections.
Cement sector continues efforts to reconcile with government
Cement Export Council President Hassan Rateb said last week the increase in cement prices in 2006 was due to rising energy and transportation costs, denying local producers intentionally created a shortage in order to hike prices.
In an effort to reconcile with the government, after the Ministry of Trade and Industry’s (MTI) decision to levy export duties on the cement and steel sectors, Rateb said he is working to convince local producers to offer 1 million tons at a LE 100 discount during the current year to be used for low-income housing construction.
In late February, MTI announced cement exports will be subject to a duty of LE 65 per ton and steel exports will face LE 160 per ton to help control inflation in the local market. Also, MTI has ordered all steel manufacturers to begin submitting weekly reports of their selling prices, similar to already implemented regulations for the cement sector.
Still, MTI’s decision is yet to show a significant impact on local prices. Cement prices continue to hold at LE 340 per ton, down just LE 5 from pre-export duty levels, and steel has held at LE 3,350 per ton, down LE 100.
MTI’s newly formed Competition Commission has launched an investigation on the steel sector for alleged monopolistic practices by cement and steel producers but has been unable to make progress due to the “lack of company and market information, according to Commission Head Mona Yassine. About 60 percent of the country’s annual production of cement and steel are controlled by Suez Cement and El Ezz Steel Rebars, respectively.
Vodafone nears signing of LE 4 billion loan agreement
Vodafone Egypt (VFE) announced last week it has reached preliminary agreements with six banks to finance a LE 4 billion loan to pay the 3G licensing fee and proceed with network upgrades.
According to Al Alam Al Youm, the banks include Banque Misr, Commercial International Bank, HSBC, NSGB, Citibank, and Barclays. The deal, stipulating a seven-year repayment schedule, is expected to be finalized by the end of the month.
In January, VFE signed with the National Telecommunications Regulatory Authority for the acquisition of a 3G License for LE 3.34 billion plus 2.4 percent of annual revenues. The company commands more than 8 million subscribers, or about 49 percent market share.