Egypt will settle $1.3 billion in arrears to international oil companies by June, the petroleum ministry said on Saturday, accelerating its previous timetable for repayments.
Egypt had accumulated about $6.1 billion in arrears to foreign oil companies by June 30, 2024.
The accumulation is due to a prolonged foreign currency shortage that delayed payments and weighed on investment and gas output.
The report notes that the shortage has since eased, though some companies have said that arrears have once again been accumulating.
Under its prior timetable, announced in January this year, the government had expected to still have arrears of about $1.2 billion by June.
Clearing the 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.
More local production would help the North African nation reduce its energy imports.
Egypt’s energy import bill has more than doubled since the outbreak of the United States–Israeli war with Iran.
The government is considering asking employees to work remotely and closing shops by 9 p.m. (1900 GMT) five days a week to cut energy consumption.
According to a recent note by the Institute of International Finance, the additional cost of oil could lead to an increase in expenditure of between 0.2% and 0.55% of the country’s Gross Domestic Product.
This is coming at a time when the country’s economy is barely recovering from successive shocks.
