Al-Ahram Weekly Online
7 - 13 June 2001
Issue No.537
Published in Cairo by AL-AHRAM established in 1875 Current issue | Previous issue | Site map

EGPC comes to the rescue

The National Bank of Egypt's acquisition of the foreign stake in MIDOR has paved the way for revival of the project. Sherine Nasr reports

MIDOR has become 100 per cent Egyptian-owned after the Israeli Merhav Group sold its 20 per cent stake in the company to the National Bank of Egypt (NBE) recently. The $1 billion refinery, which began operating in April, is now 40 per cent owned by the Egyptian General Petroleum Corporation (EGPC), 10 per cent by Enppi, 10 per cent by Petrojet -- two EGPC affiliate companies -- 36 per cent by NBE, two per cent by the Suez Canal Bank and two per cent by the private sector consortium that includes businessman Hussein Salem through his Swiss firm, Masaka.

Located in Sidi Krir, the refinery has a capacity of 100,000 barrels per day (bpd). Benzene, kerosene and naphta, a component used in petrochemical industries, are among its products.

Although the move to full Egyptian ownership of the gigantic project has been applauded, it is believed the underlying reasons were not merely political. "MIDOR is overburdened with debts," confirmed Amr Hamouda, an expert in oil marketing. The project was scheduled for launch in 1998, he said, but due to reluctance on the part of international banks to continue extending credit to the project, it came to a standstill. It was only when EGPC's acquisition of shares in the company brought its stake up to 60 per cent that the project resumed operations.

To further boost the project, EGPC has agreed to integrate MIDOR into its domestic refinery system to meet local needs, instead of having the project serve international markets as originally planned.

Meanwhile, NBE is holding negotiations with a number of Saudi investors who have shown interest in buying shares in the project.

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