The Ministry of Petroleum intends, in June, to pay a new tranche of the arrears it owes foreign partners, worth $200m.
Sources at the Ministry of Petroleum told Daily News Egypt that the new batch will be paid out of the tranches obtained by Egypt from the World Bank and African Development Bank, as part of the government’s strategy to reduce the accrued entitlements of foreign companies.
The sources pointed out that the Ministry of Petroleum seeks to pay all the dues of foreign partners in order to motivate them to increase their investments and raise the rates of production and the volume of reserves of oil and gas.
The list of foreign companies that will receive payments include Shell, Apache, BP, Eni, and Dana Gas.
Egypt owed foreign oil companies $2.4bn at the end of June 2017. The government has not announced any updates on that sum after that date.
In its agreement on the economic reform programme with the IMF, Egypt committed to repaying its dues to foreign partners.
It has pledged to repay all the late dues in 2019 without accumulating more debts, in an attempt to generate foreign investments for the energy sector which is attracting great attention following several large gas discoveries.
Egypt purchases foreign partners’ share of petroleum and gas production instead of exporting it. With the growing lack of foreign currency issue in Egypt before the flotation of the Egyptian pound in November 2016, Egypt had issues repaying some dues owed to foreign companies. They were estimated to be over $6bn before repaying a large portion of them, bringing the amount to $2.4bn in June.
