Egypt has announced that it will pay arrears of $1.3 billion to oil companies in June

The petroleum ministry announced on Saturday that Egypt would pay $1.3 billion in arrears owed to international oil companies by June. This is a significant acceleration of the previous timetable.

Egypt had accumulated arrears of $6.1 billion to foreign oil companies as of June 30, 2024. This was due to a long-term foreign currency shortage which delayed payments, weighed down investment and gas production and caused delays in payments. The shortage has eased since then, but some companies claim that arrears are once again increasing.

According to its previous timetable announced in January, the government expected that it would still be owing?some $1.2billion by June.

The clearing of debt could encourage foreign oil and gas companies to resume drilling. This would increase local production, which has steadily declined since its peak in 2021.

The North African nation could reduce its energy imports by increasing local production.

Egypt's energy bill has more than doubled following the U.S./Israeli war against Iran. The government may ask employees to work from home and close shops at 9 pm (1900 GMT) on five days of the week in order to reduce energy consumption.

According to a note published by the Institute of International Finance?, an increase in oil prices could result in an increase of expenditures of between 0.2% and 0.55% of the GDP of the country at a time that its economy is just recovering from successive shocks. (Reporting and editing by Sharon Singleton; Reporting by Mohamed Ezz)

(source: Reuters)