Egyptian industrial action dents revenues at Melrose

MELROSE Resources, the Edinburgh-based oil and gas producer that last week agreed a merger with Ireland’s Petroceltic International, yesterday blamed an 18 per cent fall in revenues on lower production in Egypt.

Output was hit by industrial action among contract security staff at the company’s South Batra plant in May, but executive chairman Robert Adair said the situation has now been resolved.

However, the disruption saw revenues from the country fall to $70.3 million (£44.5m) for the six months to 30 June, down from $97.1m a year earlier. As a result, group revenues fell to $128m, from $156m last time.

Egypt formally requested a $4.8 billion loan from the International Monetary Fund yesterday as the organisation’s chief, Christine Lagarde, visited Cairo to discuss support for the country’s ailing economy.

If approved, the loan will cover deficits resulting from shrinking tourism and foreign investment in the wake of last year’s uprising, which saw the overthrow of Hosni Mubarak.

Despite the political upheaval in Egypt, Melrose said payments from the country’s government for its oil and gas had continued to be made in line with previously agreed schedules. Adair added: “This has encouraged the company to continue to pursue an active work programme on its Egyptian acreage.”

Melrose trimmed its debt pile to $263m at 30 June, compared with $367m a year ago, while profits were flat at $33m. The merger with Petroceltic values Melrose at £165m and is expected to be completed in October.