Egypt Oilfields Open, Stock Exchange To Close

Egypt Oilfields Open, Stock Exchange To Close

Egypt’s oilfields remain open but its stock exchange and other businesses are closed amid escalating unrest after a crackdown to end Muslim Brotherhood protests sparked violence that left more than 525 people dead.

Egyptian oil and gas production by major companies including BP and BG have been unaffected by the crisis, according to a Reuters report. Royal Dutch Shell, however, closed its office for the next few days and restricted business travel there.

Egypt’s stock market will be shut today and likely re-open Sunday, an unnamed source told ZawyaDowJones. The country’s interim president declared a month-long, national state of emergency, raising fears of extended conflict that may further hurt investor confidence in the Arab state’s already struggling economy, Zawya reported.

A BP spokesman said operations and production were unaffected by the conflict. “We are monitoring the security situation in the (urban) areas where we have offices. All our people are safe and accounted for.”

Egypt produces around 728,000 barrels of oil a day, less than 1 percent of global output, and 60.9 billion cubic meters of gas, 1.8 percent of world supply, Reuters reports. BP produces about 15 percent of that oil and more than 30 percent of the gas along with its partners including Shell.

The stock market’s unscheduled shutdown has raised concerns, especially with foreign investors, who were reminded of a near two-month suspension in trading in early 2011 following the ouster of former President Hosni Mubarak, ZawyaDowJones reports.

“Shutting the market makes risk committees very nervous indeed,” said Emad Mostaque, a strategist at Noah Capital Markets. “There are hundreds of millions of dollars already waiting to get out of Egypt when EGP convertibility improves.”

After tumbling about 50 percent in 2011, the market rebounded in 2012 amid signs of some political stability, but renewed unrest and concerns about the local economy have reignited investor worries – even forcing index compiler MSCI to put the emerging market on watch for a possible downgrade earlier this year, according to  ZawyaDowJones.