Thursday, May 18, 2017

Smaller companies could miss out on IOC payments; all IOCs to be paid by 2019 - ENTERPRISE

Thursday, 18 May 2017

Smaller oil and gas operators may miss out on the second wave of payments to international oil companies (IOCs) the central bank is planning on dishing out, LeAnne Graves writes for The National. Governor Tarek Amer had said Egypt had made a payment of USD 750 mn to IOCs and will make a similar payment by 1 June. With both payments, Egypt’s arrears to IOCs would be brought down to USD 1.5 bn. “One small operator in Egypt, pumping about 10,000 barrels of oil per day, said payments from the government came in [EGP] with a ‘dribble of [USD]’. The executive, who asked not to be named, said some vendors were taking [EGP], but the firm didn’t have enough to pay anyone who wanted [USD],” Graves writes. Allen Sandeep at Naeem’s research arm expects “the amounts that would be paid per IOC would be proportionate to their part of the total outstanding amount of [USD 3.5 bn] as a whole.”

That comes as sources in government tell Al Shorouk that IOCs will be paid in full by the end of June 2019 under the terms of Egypt’s USD 12 bn bailout agreement with the IMF. The Sherif Ismail government committed to a schedule that will see it pay USD 1.2 bn before the end of FY2016-17, another USD 1.2 bn before the end of FY2017-18, and USD 1.1 bn during FY2018-19. Central Bank governor Tarek Amer had announced on Tuesday that Egypt recently paid USD 750 mn to settle part of its debts to IOCs and suggested that a further USD 750 mn would be made available in early June.

Meanwhile, Dana Gas is restructuring its debt as it struggles with dues owed by Egypt and Kurdistan. Lenders holding some USD 700 mn in Dana Gas debt have appointed investment bank Moelis and a Manhattan law firm to negotiate a restructuring of the company’s sukuks. Dana Gas faces a receivables backlog of about USD 1 bn from Egypt and Kurdistan, Reuters reports.