Egypt Accelerates Oil Debt Repayment, Aiming for Full Settlement by June
Cairo – Egypt’s government announced Saturday it will fully settle $1.3 billion in outstanding dues owed to international oil companies by June 2026, a move intended to revitalize investment in the country’s energy sector. The accelerated timeline represents a significant shift from earlier projections.
The Ministry of Petroleum and Mineral Resources stated the repayment will help restore investor confidence after years of delayed payments stemming from foreign currency shortages. While those shortages have eased, recent reports indicated a re-emergence of payment backlogs.
Previously, the government anticipated holding around $1.2 billion in arrears by mid-2026, according to a plan unveiled in January. This latest announcement signals a stronger commitment to stabilizing the sector and attracting further upstream activity.
As of June 2024, Egypt’s total arrears to foreign energy companies reached approximately $6.1 billion. Settling the debt is seen as crucial to reversing a decline in domestic oil and gas production, which peaked in 2021. Increased local output is vital as Egypt seeks to reduce its growing energy import bill, which has more than doubled due to regional geopolitical tensions.
Industry analysts believe clearing the debt will encourage international firms to resume drilling and exploration.
The government is also exploring energy conservation measures, including potential remote work policies and adjusted shop closing times, to manage consumption and alleviate pressure on the national grid.
However, challenges remain. The Institute of International Finance (IIF) estimates that rising global oil prices could increase Egypt’s public spending by 0.2% to 0.55% of GDP, potentially straining an economy still recovering from recent economic shocks.
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