Egypt arrears to foreign oil companies rise at end of 2015

04 January 2016

Unpaid dues to foreign oil companies sat at $3bn at year end, rising from $2.7bn at the end of October 2015

Egypt’s unpaid dues to foreign oil companies reached $3bn at the end of 2015, rising from $2.7bn at the end of October, news agency Reuters cited Petroleum Minister Tarek el-Molla as saying.

The ministry in September said that Egypt aimed to reduce the total amount owed to foreign oil companies to $2.5 billion by the end of 2015 and pay it off completely by the end of 2016. The minister did not say why the total arrears have risen since November.

Egypt has run short of hard currency since a 2011 uprising drove tourists and investors away. Reserves almost halved to $16.4bn by the end of November. Investments into energy sector have also suffered due to delays in payments to foreign petroleum companies. A recent drive to increase the price paid for domestic production and clear outstanding dues have encouraged new contracts signed in 2015, according to Reuters.

Once an energy exporter, Egypt, which is the most populous Arab nation, has turned into a net importer because of declining oil and gas production and increasing consumption.

 

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