Egypt is revising the prices it pays to buy gas from foreign energy companies operating in the country and plans to sign new contracts to "reassure" the firms, al-Mal newspaper quoted the oil minister as saying.

Sherif Ismail said state-run Egyptian Natural Gas Holding Company (EGAS) would sign seven new contracts and modify seven others within two weeks, in comments published on Sunday.

He said that the effort is aimed at "finding the required balance between the interests of the government and the companies", explaining that the price that Egypt pays foreign firms for gas they produce in the country is "no longer appropriate in the current time".

The oil minister did not say how the prices would change or which companies were involved in the negotiations.

Egypt pays offshore gas producers on average around $2-$3 per million British thermal units, according to industry estimates. Comparable payments for UK gas are currently above $10 and for Asian supply above $17.

Because the amount the government pays them for fuel barely covers their investment costs, exploration companies are not developing untapped finds in Egypt's gas-rich waters.

This has in turn caused domestic gas shortages, prompting the government to divert more gas away from the country's two liquefied natural gas export plants at Damietta - which was idled late last year - and at Idku.

The negotiations over the new pricing arrangements will take into consideration exploration costs, investment size, and where production is occurring, al-Mal reported. – Reuters