Egypt Plots Upstream Revival, If It Can Find The Cash

IOCs in Egypt face a mixed outlook. Some are benefitting from Cairo’s payment flexibility but others have been hamstrung by the $3.5bn-plus they are owed for past output. The burden has fallen more on smaller firms unable to ride out the lean years of low oil prices.

Egypt’s receivables bill to IOCs remains a major point of contention. It ballooned to $6bn in 2014 and although it fell to $3bn at the end of 2015, it edged back up to $3.5bn in December according to official figures.

A lack of forex at Egypt’s Central Bank means state oil firm EGPC has struggled to obtain the cash to pay firms. In 2010 reserves stood at $36bn. They had fallen to just $15.5bn by mid-2016 before an inflow of foreign support tied to November’s $12bn IMF deal boosted the end-year figure to $24.3bn.

EGPC has been left to resort to ad-hoc agreements with IOCs in an attempt to deflect threats to slash investment or quit the country. These include allowing Canadian-listed TransGlobe and the UAE’s Dana Gas to market their oil and condensate output respectively. (CONTINUED - 2209 WORDS)