Egypt Owes $3 bn to Foreign Oil Firms

At the end of December 2015 Egypt owed $3 billion to foreign oil companies as against $2.7 billion it owed at the end of October, Petroleum Minister Tarek El Molla told Reuters on Sunday.

This development is not as per ministry’s plan, which aimed at reducing the arrears owed to foreign oil companies to $2.5 billion by the end of 2015 and to pay them off completely by the end of 2016.

Delays in paying back foreign petroleum companies had discouraged investment in the sector, but a drive to increase the price paid for domestic production and pay back arrears had encouraged new contracts signed in 2015, Reuters said. El Molla did not provide further detail on why total arrears have risen since November.

Domestic natural gas production in Egypt has declined in recent years as foreign firms cut down on investments in the sector as government struggled to pay the arrears. The North African nation has resorted to LNG imports to satisfy local demand. The country is expected to remain an importer till the end of the decade.