The government is aiming to repay a large part of its dues, which total almost $1.5bn, over this year to foreign partners in the petroleum sector, according to Tarek El-Molla, head of the Egyptian General Petroleum Corporation (EGPC). The amount mentioned is higher than previously stated.
The dollarised loan arrangement, the value of which has not yet been determined, will be proposed to foreign banks in order to pay part of the dues to foreign partners in US dollars.
El-Molla pointed out that while the value of the loan is still under discussion, it will be provided for under the loan ceiling in Egypt in the present economic conditions.
He added that a loan arrangement of EGP 4bn was determined yesterday through local banks for a partial payment to another foreign partner.
Dues to foreign partners in the petroleum sector have amounted to $5.9bn so far, according to El-Molla.
The Ministry of Petroleum paid about $1.5bn as part of the dues to foreign companies operating in Egypt, of which an amount of approximately $1.2bn was paid in foreign currency and the rest in Egyptian pounds, during December last year, according to El-Molla.
He added that the EGPC was unable to abide by the agreements it entered into with foreign partners in regards to the debt repayment schedule due to the EGPC’s need to bear the expenses for incoming shipments of petroleum products that were essential to the country.
The agreement also states that the repayment for the rest of the debt will be done through the EGPC’s own resources, in monthly instalments until 17 December.
El-Molla added that a new schedule for these payments would be determined after loans are determined at local and foreign banks, which will help in reducing the government’s indebtedness to foreign partners.
Foreign petrol companies that are operating in Egypt are also planning investments valuing $8.2bn for the current fiscal year. The investments would develop oil and gas research, exploration, and development and also cover operating expenses, according to El-Molla.
Currently, there are about 70 international oil companies operating in the fields of research, exploration, and production of petroleum products in Egypt. The total foreign investment in the petroleum sector during the last fiscal year amounted to approximately $8bn.