The Ministry of Petroleum owes its German partner RWE $400m in dues in exchange for its stake in oil and gas from concession areas.
A source in the petroleum sector revealed to Daily News Egypt the real reason behind the employees issue with the Egyptian General Petroleum Corporation (EGPC).
The source said the Association of Professional Staffing Companies (APSCo), a company responsible for staffing supply to Suez Oil Company (SUCO), requested that its revenues be increased by 45% of the value of salaries SUCO pays its employees rather than 38% when its contract is up for renewal.
This led to RWE refusing to renew the employment contract with APSCo due to the decrease of Brent Crude Oil prices in global markets.
The APSCo is owned by the EGPC and holding companies. It provides professional employment for all companies in the sector, the source added. The number of staff at SUCO reaches about 1,350 employees although work sites need no more than 900.
The source said that RWE demanded its accumulative dues by the Ministry of Petroleum in order to continue the implementation of development plans in concession areas at the Red Sea’s Gabal El-Zeit, Ras Gharib, Ras Badran in Abordes in South Sinai, and Desouk in Kafr El-Sheikh.
RWE’s agreement for the Gulf of Suez concession fields of Ras Badran, Gabal El-Zeit, and Ras Fanar will end in July 2017.The agreement will not be renewed as the partner did not receive its continuously increasing dues.
The source said that the Gulf of Suez fields, affiliated with SUCO, produce about 1,000 barrels of crude oil equivalent per day. The government receives the full production in order to provide the domestic market’s requirements for fuel.
A number of APSCo’s employees who work at SUCO went on strike at the company’s sites and administrative headquarters to demand that the EGPC solve their problems with RWE.
RWE did not pay salaries to workers in June in protest of the APSCo receiving 45% of each worker’s salary which is paid by the foreign partner.