Egypt To Pay Some $1 Bln Owed Oil Firms Within Two Months – Minister

Egypt will pay about USD 1 bln of the money it owes to foreign oil companies within the next two months, the state’s MENA news agency said, quoting Oil Minister Sherif Ismail.

Egypt says it owes some USD 6.3 bln to those companies.

It last year said it paid USD 1 bln of the money it owes the international firms as part of a repayment scheme seeking to revive confidence in the economy after years of turmoil.

“A new chunk of around USD 1 bln will be paid to foreign firms within two months,” Ismail said on Tuesday.

The country has previously said it would repay a further USD 3 bln in monthly installments until 2017 as an incentive to encourage foreign oil companies to increase exploration and production.

Egypt has been struggling to meet soaring energy bills caused by high subsidies on fuel products for its 85 million people, most of whom are poor and uneducated.

The government’s ability to pay oil companies and contractors was hit after the popular uprising that ousted president Hosni Mubarak in Feb. 2011 which roiled investment and tourism and cut tax revenues.

Financial disclosures by firms including BP, BG Group , Edison SpA and TransGlobe Energy show Egypt owed them more than USD 5.2 bln at the end of 2012.

Political turmoil has intensified after the army overthrew elected Islamist president Mohamed Mursi last year following widespread protests against him.

Since Mursi’s ouster, Saudi Arabia, Kuwait and the United Arab Emirates have poured in billions of dollars in grants, interest-free loans and oil products.

Ismail said Egypt receives around USD 700 m in petroleum aid every month from Arab states.

Source: Reuters