Egypt will settle $1.3 billion in arrears to international oil companies by June, the Petroleum Ministry said on Saturday, accelerating its previous \u200ctimetable for repayments.<\/p>\n
<\/p>\n
Egypt had accumulated about $6.1 billion in arrears to foreign oil companies by June 30, 2024 due to a prolonged foreign currency shortage that delayed payments and weighed on investment and gas output. The shortage has since eased, though \u2060some companies have said that arrears have been once again accumulating.<\/p>\n
<\/p>\n
Under its prior timetable, announced in January this year, the government had expected to still have arrears of some $1.2 billion by June.<\/p>\n
<\/p>\n
Clearing debt may encourage foreign oil and gas companies to resume drilling, which would boost local production that has been steadily falling since peaking in 2021.<\/p>\n
<\/p>\n
More local production \u200cwould \u2060help the North African nation to reduce its energy imports.<\/p>\n
<\/p>\n
Egypt’s energy imports bill has more than doubled since the outbreak of the US-Israeli war with Iran and the government is considering asking employees \u2060to work remotely and closing shops by 21:00 CAT five days a week to cut energy consumption.<\/p>\n
<\/p>\n
According to a recent note \u2060by the Institute of International Finance, the additional cost of oil could lead to an increase in expenditure \u2060of between 0.2% and 0.55% of the country’s gross domestic product at a time when its economy is barely recovering from successive shocks.<\/p>\n
<\/p>\n
–Reuters–<\/p>\n
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