Egypt Pays Circle Oil $15 mn as Part of Outstanding Debt

Circle Oil Plc, the Middle East and North Africa focused oil and gas player, on Friday announce receipt of $15 million as part of a recent special payment distribution by the Egyptian government to oil companies operating in the country.

“This has resulted in a significant reduction in the outstanding debt owed to the company,” Circle Oil said in a statement. Circle’s current acreage lies in the Gulf of Suez area.

Egyptian government has been clearing outstanding debt to energy firms operating in the country. In recent weeks the government has made payments to BG Group and Dana Gas.

BG Group recently got further $350 million payment reducing the company's domestic receivables balance in Egypt to around $920 million. Dana Gas got payment of $60 million as part of outstanding debt representing 28 percent of the total overdue receivables of $212 million.

Egypt owes billions of dollars to foreign oil and gas companies and wants to quickly repay the debt in order to help boost exploration and ease energy shortage in coming years.

Gas production has been declining over the years amid rising domestic consumption, but firms have been reluctant to increase investment in exploration and production, particularly in costly offshore areas, until the government repays them.