Israeli Investor Denies Selling Egyptian Oil Refinery Stake
Yossi Maiman yesterday denied Associated Press reports from Egypt that his Merhav company, the biggest Israeli investor in Egypt, has sold its 14-percent stake in the $1.2 billion Middle East Oil Refinery (Midor), reported Haaretz on Wednesday.
According to the AP report, the director of trade affairs for Midor, Mohamed Hilmy, said Tuesday that the state-owned National Bank of Egypt had purchased Merhav's shares. Hilmy said the purchase of Merhav's shares makes the National Bank of Egypt Midor's largest share holder - at 38 percent - after the state-owned Egyptian General Petroleum Corp., which owns 60 percent of Midor's shares with two affiliates.
Last week, Egypt's parliament - under the cloud of the Al-Aqsa Intifada - debated the future of the joint Israeli-Egyptian refinery, built near Alexandria and seen as an example of peaceful cooperation between Israel and its Arab neighbors. Egyptian Economy and Trade Minister Youssef Boutros-Ghali told Egypt's parliament last week, however, that Egypt wanted Israel to sell its stake in Midor.
"Egypt is currently trying to push out Israel from Midor," Boutros-Ghali said. "(Midor) was established ... when the political relationship with Israel was better and the option for peace was the best."
"Egypt is currently trying to push out Israel from Midor," the minister had told Parliament, "(Midor) was established ... when the political relationship with Israel was better and the option for peace was the best."
Maiman, however, dismissed the reports that he was pressured to sell his holdings in the refinery. "The brouhaha is purely business-related, and relations with our Egyptian partners continue to be correct on the business level and warm on the personal level," he said.
There is some speculation that Maiman is eager to sell his shares in the refinery in order to invest the proceeds in the Eastern Mediterranean Gas (EMG) project, another joint Israel-Egypt venture, which aims to stretch a gas pipeline from Egypt to Turkey, said Haaretz.
On Monday, Nimrod Novik, Merhav's vice president, said the company was ready to sell its shares to "a serious buyer," adding that, "if there is a good offer, we will certainly consider it."
The 100,000 barrels-per-day refinery was built with US and European technical help after the deal was sealed in 1996. The refinery was originally owned by Egyptian businessman Hussein Salem and Maiman's Merhav group. The European Bank of Investment provided about $300 million in long-term credit for the refinery. At its launch, each side had 40 percent of the refinery's equity. Egypt General Petroleum, which was to provide the crude oil, held the rest.
Egypt blames Prime Minister Ariel Sharon for the renewed Israeli-Palestinian violence, and may be already turning to Gulf Arab investors to buy Israel's reported former share in the refinery, according to businessmen familiar with the refinery deal.
The businessmen told Haaretz that Egypt's National Bank is facing serious liquidity problems because of over-lending, so may be keeping the purported Midor stakes for a later sale.
"The (Gulf) Arabs could not have bought shares from the Israeli partner, and now (Egypt) can sell the refinery as a 100-percent Egyptian ownership," one businessman said. They said Egyptian President Hosni Mubarak, who visited both Saudi Arabia and the United Arab Emirates this week, is seeking Gulf participation in the Egyptian oil deal.
On Sunday, Egyptian Prime Minister Atef Obeid confirmed Egypt was negotiating with the Emirates and other Gulf states to refine oil passing through a pipeline in Egypt – Albawaba.com
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