Egypt To Settle $1.3Bn In Oil Arrears By June To Boost Energy Investment

(MENAFN- Daily News Egypt) Egypt's Ministry of Petroleum and Mineral Resources announced on Saturday that it will settle $1.3bn in outstanding dues owed to international oil companies by June 2026, accelerating its previously announced repayment schedule.

The move comes as part of broader efforts to restore investor confidence and revive upstream activity, following years of delayed payments caused by foreign currency shortages.

According to official data, Egypt's arrears to foreign energy companies had reached approximately $6.1bn as of June 2024. While the foreign currency crunch has since eased, some companies have recently indicated that payment backlogs had begun to accumulate again.

Under an earlier plan announced in January, the government expected to still hold around $1.2bn in arrears by mid-2026. The revised timeline signals a stronger commitment to clearing dues and stabilising the sector.

Industry analysts note that settling arrears could encourage international oil and gas firms to resume drilling and exploration activities, potentially reversing a decline in domestic production that has persisted since its peak in 2021.

Boosting local output is critical for Egypt as it seeks to curb its rising energy import bill, which has more than doubled amid ongoing geopolitical tensions in the region.

The government is also considering energy-saving measures, including remote work policies and earlier shop closures, to manage consumption and reduce pressure on the national grid.

Meanwhile, the Institute of International Finance (IIF) estimates that higher global oil prices could increase Egypt's public spending by between 0.2% and 0.55% of GDP, adding further strain to an economy still recovering from successive external shocks.

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