LONDON--Egypt plans to pay back some of its ballooning debt to
international energy companies in a bid to revive confidence in its
flagging hydrocarbon sector and boost production, the country's oil
minister Sherif Ismail said Thursday.
Egypt currently owes around $5.9 billion to foreign producers
for oil and gas they sell to the government for use domestically.
Its payments have been interrupted due to the continuing political
and civil unrest in the country following the removal of President
Hosni Mubarak from office in 2011.
"In the next few months, we will make a partial payment to
foreign companies. The minimum payment would be $1.5 billion," Mr.
Ismail said in remarks aired on Egyptian state television.
Foreign energy companies operating in Egypt have scaled back
investment and pondered exiting the market altogether in recent
months.
BG Group PLC, one of the major firms operating in the country,
has declared force majeure on its Egypt operations and written off
$1.3 billion in its business there, while Poland's state-owned
producer PGNiG abandoned a concession because of the political
situation in the country.
As well as not receiving their full payment for domestic oil and
gas sales, because of high Egyptian demand foreign companies are
missing out on selling more of their output on international
markets, where they are able to charge higher prices.
Among the companies that could receive payments this year are BP
PLC, Apache Corp., BG and Dana Gas PJSC, an energy company based in
the United Arab Emirates, Tarek El Mulla, chairman of state-run
Egyptian General Petroleum Corp. told The Wall Street Journal.
Last year, Egypt made payments totaling $1.5 billion to a number
of energy firms operating in the country, while promising to pay $3
billion by 2017. The payments came after Saudi Arabia, Kuwait and
the U.A.E. promised $12 billion in loans, grants and fuel shipments
to help Egypt's ailing economy.
Write to Summer Said at summer.said@wsj.com
06-26-14 0938ET
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