Egypt's oil minister makes rare trip to Iran for oil talks after Saudi suspension

November 6, 2016 4:25 PM EST

Tarek El Molla, Egypt's Minister of Petroleum and Mineral Resources, is seen during a meeting with Cypriot Foreign Minister Ioannis Kasoulides at the Ministry of Foreign Affairs in Nicosia, Cyprus August 31, 2016. REUTERS/Yiannis Kourtoglou


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CAIRO (Reuters) - Egyptian Petroleum Minister Tarek El Molla was on his way to Iran on Sunday to try to strike new oil deals, sources close to his delegation said at Cairo airport, after Saudi Arabia suspended its oil agreement last month.

After that suspension, Egypt voted in favor of a Russian-backed U.N. resolution on Syria in October that excluded calls to stop bombing Aleppo, which Saudi Arabia strongly opposed.

Saudi Arabia has showered Egypt with billions of dollars in aid since 2013, when President Abdel Fattah al-Sisi ousted elected Mohammed Mursi of the Muslim Brotherhood and banned the Islamist movement, which Riyadh opposes.

The Saudi deal was for 700,000 tonnes of oil products a month for five years under a $23 billion deal between Saudi Aramco and the Egyptian General Petroleum Corporation (EGPC) to be paid off over 15 years.

Molla is set to meet several senior Iranian officials to discuss the possibility of securing oil supplies from Tehran, one source, who accompanied Molla to the airport, said.

His visit to Iran, Saudi Arabia's main regional rival, may signal a further rift between Egypt and its top benefactor.

Molla said last month it was unclear when the Saudi oil deliveries would resume and Saudi Arabia has provided no reason for their suspension.

Egypt has since worked to secure new energy sources, signing a memorandum of understanding last week with Azerbaijan's state oil company SOCAR for up to 2 million barrels of crude oil.

The EGPC last week signed a farm-out agreement with Kuwait Energy Plc giving Egypt's state oil buyer a 20-percent participating interest in its Siba field in Iraq.

Egypt and Iran have had strained diplomatic ties since the late 1970s and an Egyptian official visiting Tehran is a rarity.

(Writing by Eric Knecht; Editing by Ahmed Aboulenein and Louise Ireland)



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