Minister of Petroleum Sherif Ismail is studying the possibility of providing another payment to Egypt’s petroleum foreign partners in the coming period, government officials revealed Friday.
The government sources stated that the minister is aware of the importance of reimbursing foreign partners to encourage investment and a production increase.
At the end of April, debts owed to foreign partners by the Egyptian petroleum sector increased to approximately $6bn, from $5.7bn in March. Of the total $6bn indebtedness, $1.5bn is owed to British partner British Gas, $1.3 to Italian partner Enni and $800m to Malaysian partner Petronas.
President of the Egyptian Natural Gas Holding Company (EGAS) Khaled Abdel Badie has previously stated that the rate of development and exploration of oil fields by foreign partners has continued to deteriorate as a result of increasing dues of about $300m in one month.
During the past year, the Egyptian government has repaid some $1.5bn of its dues and it is aiming to repay $3bn over monthly instalments by 2017.
The Egyptian government has been negotiating with foreign partners to adjust the price of gas from $3 to $4 per 1m BTUs. Former Petroleum Minister Osama Kamal told the Daily News Egypt that the increased share price has been determined in accordance with production costs.
The price being negotiated by the government with the partner is preferable for Egypt than importing gas at a rate that ranges between $15-17 per 1m BTUs, Kamal added.
The petroleum minister told the Daily News Egypt that gas price adjustments for foreign partners with newly discovered fields are underway, and the prices will reflect the economics of each project based on whether production takes place on surface layers or deep layers.
