“Naftogaz” will reduce investment in oil and gas project in Egypt

“Naftogaz” will reduce investment in oil and gas project in Egypt


The profitability of this asset the company is “at the zero point, i.e., it consumes all the money and gives”, said the head of Ukrainian state-owned Andriy KOBOLEV.

KYIV, 31 Mar. “Naftogaz of Ukraine” has no plans in the near future to sell oil and gas project in Egypt, although the production there currently is not profitable, said the head of Ukrainian state-owned Andriy KOBOLEV. However, according to him, investment in the project will be minimized.

“Production continues. We carry out that program, we have to follow there in accordance with the agreement on production sharing. It is quite hard, of course, at such low oil prices. There main product is oil, the asset has lost most of its value. Sell it, get rid of it during the lowest oil prices we think is inappropriate,” KOBOLEV told reporters on Thursday.

He added that today the profitability of the asset of the company is “at the zero point, i.e., it consumes all the money and gives”.

KOBOLEV also said that in this situation, “Naftogaz” plans to modify its strategy towards the asset, minimising the investments to match the level of income that the company receives. “We believe the asset perspective, to give it up, throw we not going,” he added.

Naftogaz since April 2010 he has been commercial oil production at the East wing area of Alam El Shawish Еаst in the Western part of Egypt. Mining is conducted under concession agreements, which “Naftogaz” has signed with the Egyptian state-owned Ganope in December 2006.