Dues to foreign companies operating in the oil sector have increased by $300m, while the government’s inability to pay such an amount – even as it repays small portions of its debt – has lead to an accumulation of the total debt to an estimated $6bn.
The value of the foreign partner’s share, crude gas and oil obtained by the EGPC, is about $700m monthly. The raw product is not exported from Ras Gharib because it is heavy and cannot be refined in Egyptian refineries, said Tareq Al-Mula, head of the EGPC.
Although EGPC is committed to repaying its dues to foreign partners in accordance with its debt repayment schedule, which will be renegotiated once the Petroleum Authority begins paying its dues again, the fundamental solution to this problem is increasing the country’s oil and natural gas production.
The government is targeting to repay a large part of its dues this year, an amount of $1.5bn, according to Al-Mula.
An arrangement for a loan in US dollars is still under discussion with foreign banks, as a result of the government’s desire to pay part of its dues back in US dollars.
The total value of the loan has not yet been determined, but will be decided based on Egypt’s loan ceiling in the present economic conditions, said Al-Mula.
He added that a loan arrangement of EGP 4bn has also been arranged with local banks for a partial payment to foreign partners in Egyptian pounds.