Egypt Eyes Borrowing from Morgan Stanley, JP Morgan to Repay Oil Debts

Big 5

Egypt is in talks with Morgan Stanley and J.P. Morgan alongside other Arab and local banks, aiming to repay debts owed to foreign oil companies operating in the country, said an official from the Egyptian General Petroleum Corporation (EGPC).

In a telephone conversation with the Anadolu news agency, the official revealed Egyptian government’s ongoing negotiations with the two US lenders alongside other Arab and local banks, including the National Bank of Egypt (NBE) over US$1.5 billion loan.

The official, who spoke on condition of anonymity, said paying part of the debt before the end of the current year, is a vital step to open the door to more foreign investments.

Egypt owed around US$5.9 billion to foreign oil firms as of the end of June.

The Egyptian General Petroleum Corporation (EGPC) is associated with the Ministry of Petroleum and Mineral Resources, and oversees public sector companies for oil and most of the companies involved in the joint sector with foreign partners.

Egypt wants to repay money it owes international firms as part of a scheme seeking to revive confidence in the economy after years of turmoil following the popular uprising that ousted president Hosni Mubarak in February 2011.

Last Sunday, Egyptian Oil Minister Sherif Ismail stated that Egypt wanted to borrow money to pay the debt owed to foreign oil firms, so as not to put pressure on reserves at the country’s central bank, which has provided funds for debt payments this year.