Following the circulation of documents originating from intergovernmental meetings between the Russia Federation and Egypt, Rusneftegaz can confirm that we are considering new potential opportunities that are available in the North African nation. This is a continuation of the strategy that has in recent times seen our organization begin talks to enter the oil and gas industry of Algeria, another country that has strong potential for rapid growth in this sector. Despite the fact that Egypt is not a member of the Organization of the Petroleum Exporting Countries, otherwise known as OPEC, the Arab Republic maintains one of the largest fossil fuel industries in Africa. This component of their economy continues to hold significant reserves of crude yet to be extracted, and is a net exporter of refined products. However, it should be noted that their identified hydrocarbon reserves are largely depleted, and existing wells are becoming increasingly challenging to extract from. Consequently, the Egyptian petroleum sector requires considerable financial investment and technical expertise, similar to what is also required in Algeria. Therefore, as a large and successful corporation, we have accrued extensive experience and knowledge working on unconventional wells in remote regions of Russia that face extreme climatic conditions, making our organization an ideal partner for our Egyptian counterparts and contemporaries. In response to the prospect of our potential expansion into the region, Deputy Chief Executive Officer Aleksandr Filyurin stated:
“We are looking at a number of different proposals at the moment in a number of different countries. Since we started this process, we have already determined that there are too many challenges for us to expand into the American and European markets. But after we did more research into developing and emerging regions, we found that the oil industries in these countries usually require large amounts of investment, and this could provide some good opportunities for us. Bearing this in mind, when we were given the opportunity to look at projects in countries like Algeria and Egypt, we quickly decided to seize the opportunity. We have put a lot of work into this over the past few months, I really hope that we will have something positive to announce soon.”
Thus, our management has concluded that the preliminary research fund designated to investigate projects in Algeria should be sufficient to also include any inquiries for schemes in Egypt, although this sum will be expanded if necessary. Likewise, our board of directors also believes that our organization possesses adequate resources to engage in these potentially lucrative projects, which may ultimately deliver greater return on investment regardless of location. Rusneftegaz continues to be appreciative of the effort made by ministers, officials and public servants to ensure that our interests are represented at the highest levels possible, and we are delighted to report that our organization will send a delegation to attend another intergovernmental meeting shortly. We will continue to endeavor to provide updates regarding our international expansion plans, and will make any relevant announcements at an appropriate time.