Egypt Oil Dues: $1.3bn Repayment to Speed Up by June 2026 | OilPrice.com
Egypt’s petroleum ministry announced Saturday it will accelerate repayment of $1.3 billion in arrears owed to international oil and gas companies, aiming for full settlement by the end of June 2026. The move, confirmed by Petroleum Minister Karim Badawi, is intended to restore investor confidence and bolster domestic energy production.
The commitment represents a significant shift from earlier government projections. In January, officials anticipated holding approximately $1.2 billion in outstanding payments to energy firms by mid-2026. The accelerated timeline signals a stronger dedication to resolving the long-standing issue of delayed payments, which have hampered investment in Egypt’s energy sector.
Egypt’s outstanding debt to foreign energy companies peaked at around $6.1 billion in June 2024, stemming from foreign currency shortages that constrained the country’s ability to meet its financial obligations. While the currency situation has improved, recent reports indicated a re-emergence of payment delays, prompting the government’s revised plan.
According to Badawi, the ministry has already reduced the arrears from $6.1 billion to approximately $1.3 billion through coordination with the Central Bank of Egypt and the Ministry of Finance. He stated that a series of investment incentives introduced in the latter half of 2024 have contributed to stabilizing payment flows.
Industry analysts suggest that settling the arrears is crucial for encouraging international oil and gas companies to resume drilling and exploration activities. Domestic production has been in decline since 2021, and increased investment is seen as vital to reversing this trend. Boosting local energy output is a priority for Egypt as it seeks to reduce its growing energy import bill, which has more than doubled due to geopolitical tensions in the region.
The government is likewise exploring energy conservation measures, including potential policies promoting remote work and earlier shop closures, to manage energy consumption and alleviate pressure on the national grid.
The Institute of International Finance (IIF) has cautioned that rising global oil prices could increase Egypt’s public spending by 0.2% to 0.55% of GDP, potentially exacerbating economic challenges as the country continues to recover from recent external shocks.
Badawi indicated that the accelerated repayment plan aligns with directives from President Abdel Fattah El-Sisi, who views clearing the arrears as essential for attracting new investments and lessening the country’s reliance on energy imports. The ministry is currently coordinating with oil and gas partners to finalize the settlement process, maintaining regular monthly payments in the interim.