Egypt ‘preparing timetable to repay energy debts’
Cairo, September 1, 2013
Egypt is preparing a timetable for repaying arrears on debts it owes to foreign oil companies to encourage them to continue investing in the country, the Petroleum Ministry said on Sunday.
Egypt owes at least $5 billion to oil companies producing oil and gas on its territory, with half of it overdue, according to corporate reports issued earlier this year.
The government, seeking to avoid public unrest, has delayed oil payments as it struggles to meet soaring energy bills caused by high subsidies on fuel products. Some of the debts were accumulated even before Mubarak was ousted.
Currency reserves have dwindled, food bills risen and tourism and foreign investment collapsed since the 2011 uprising that toppled Hosni Mubarak.
Foreign companies will be asked to agree to the proposed timetable, which is being drawn up in coordination with various government entities, Oil Minister Sharif Ismail said in an emailed statement.
He hoped that a schedule to pay the arrears would encourage companies to continue investing in exploration and development. The government also wanted to encourage foreign companies to speed up their development of recently discovered wells.
Financial disclosures by firms such as BP, BG, Apache, Edison and TransGlobe Energy show Egypt owed them more than $5.2 billion at the end of 2012.
Dana is owed $230 million by Egypt in overdue payments for gas supplies and says it is in active dialogue with the government over the debts.
BP was owed $3 billion as of the end of 2012, of which around $1 billion was overdue. BG was owed $1.3 billion, of which $600 million was overdue. Edison has $400 million overdue, followed by TransGlobe and Dana with over $200 million each. – Reuters