Egypt pays another $1.5 billion to oil producers
The Egyptian government has paid an additional $1.5 billion in debt owed to foreign oil and gas companies, bringing its total overdue payments down to $4.9 billion, the Ministry of Petroleum said on Thursday.
The payment was funded through an EGP 10 billion loan from local banks, arranged by the National Bank of Egypt, the statement said.
Egypt paid the last $1.5 billion debt instalment to foreign oil operators in December 2013. The country needs to keep up with its overdue payments to encourage fresh investment in oil and gas exploration, said Petroleum Minister Sherif Ismail.
The petroleum ministry is also taking a more flexible approach in its upstream contract negotiations, and appears open to offering better terms and prices to existing and new concession holders (see BP contract renegotiation could revive Egyptian offshore,2 October 2014).
The government has, for example, negotiated a deal with Dana Gas under which the company can strip out and export any new condensate production in Egypt and use the revenues to pay down the $280 million in outstanding receivables owed to the company (see Dana to increase Egyptian output but shortage persists, 2 October 2014).
The ministry will also allow IOCs to sell gas directly to private industrial users at a price that can be negotiated after gas is found – rather than one locked into production-sharing agreements.
