• Monday, May 27, 2024
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Egypt pays $1.5 billion to foreign energy companies

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Egypt has paid $1.5 billion of its debt to foreign energy companies, the oil ministry said in a statement.

Egypt has delayed payments to oil and gas firms since a popular uprising ousted autocrat Hosni Mubarak in 2011 and brought on almost three years of instability. Some of the debts were incurred before the revolt.

The Arab world’s most populous country faces its worst energy crisis in decades. It still owes foreign energy firms $4.9 billion after this latest payment, which was financed by a loan from Egyptian banks.

The oil ministry’s figures indicate that Egypt’s debt was at $6.4 billion immediately before this payment, up from the $5.9 billion reported at the end of April. That indicates Egypt has accumulated $500 million in fresh debt over the past five months.

The oil ministry said that Egypt would begin to seek a similar loan from international banks to help offset the debt.

Meanwhile, British gas producer BG Group said it had received $350 million from the Egyptian government following a commitment by Cairo to repay outstanding debts to the energy industry.

The transaction reduces the energy company’s receivables balance in Egypt to around $1.2 billion, BG Group added.

The Arab world’s most populous country is facing its worst energy crisis in decades as gas production declines and consumption rises. Gas production is steadily declining in Egypt while consumption keeps rising but energy companies have been reluctant to increase investment after the government fell behind on payments.