Egypt has paid off US$1.5 billion of its debt to foreign oil and gas companies, the country's petroleum minister has announced in a statement, according to Egyptian media.
The payment, announced a day after the Egyptian government signed $1.4 billion worth of loans with a consortium of banks led by the National Bank of Egypt (NBE), brings the debt the country owes to foreigh firms down to $4.9 billion.
Egypt had delayed payments to oil and gas firms since a popular uprising oustsed president Hosni Mubarak in 2011. The last repayment by Egypt to the foreign companies was an installment worth $1.5 billion in December 2013. According to Reuters, the cash was paid to oil majors including BP and BG Group. At the time, BG Group was owed the most.
Egypt has accumulated debt to foreign partners in the oil and gas sector operating in the country, but it is now also suffering from an escalating energy crisis, with fuel shortages and regular blackouts.
“The government aims to reduce the debt to encourage the firms to step up research and exploration operations, to boost local production of oil and gas and minimise imports, which in turn will spare the cash to continue paying Egypt's due debts to its foreign partners,” said Minister of Petroleum Sherif Ismail in the statement.
The statement did not mention which foreign firms received the latest payment.
Earlier this week, the minister had announced that Egypt would be paying $2-3 billion of its debt to foreign oil and gas companies before the end of the calendar year.
On Wednesday, BP said it had started drilling the Atoll-1 deepwater well offshore Egypt using the Maersk Discoverer drillship in 923m water depth. The well spuded on 12 Septemer and drilling is expected to last into next summer.
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