Egypt Oil Debts Put Brake On Investment

Egypt’s gas output finally looks to have turned the corner after years of decline (see p4 ). The same cannot be said for oil, output of which fell to a multi-decade low of 614,000 b/d in March.

Firms are going slow on the investment needed to counter high underlying decline rates (never mind increase output) due to the continued unreliability of payment for their production from state oil firm EGPC.

Central Bank Governor Tariq Amir on 16 May said Egypt had just paid off $750mn of the country’s receivables bill to IOCs active in the country, and that it would pay off another $750mn in June. Egypt owed a total of $3.4bn at end-March according to its own reckoning, so, if completed, these two 1H 2017 payments would equate to 44% of the then total. Oil Minister Tarek El Molla says receivables will be halved by the end of the year and eliminated by mid-2019. (CONTINUED - 750 WORDS)