Egypt Promises $1.5Bn Receivables Payout

Cairo’s push to pay international oil firms some $1.5bn of the money they are owed is an attempt to foster energy sector investment. Outstanding receivables and a low gas price are the main obstacles preventing the expansion of gas production.

Egypt has vowed to pay international oil companies $1.5bn – or around a quarter of outstanding receivables – in a bid to increase foreign investment in the country’s energy sector. “There is approval to pay $1.5bn,” Prime Minister Hazim al-Biblawi told delegates at an investment forum in Cairo this week.

Faced with a growing gas crunch and a stagnating economy, the provisional government is desperate to attract foreign investment into the energy sector and the country at large. The forum was aimed at GCC states in particular, whose governments have already pumped billions in aid into Egypt.

This aid has already been used to provide some compensation to gas producers, and may have made it possible for the government to pay out a part of the roughly $6bn owed to IOCs (see table). Paying back a quarter of outstanding receivables before the year is out was previously touted by Oil Minister Sharif Isma’il. (CONTINUED - 829 WORDS)

DATA INSIDE THIS ARTICLE

table Egypt’s Debts To Foreign Oil Companies*