CAIRO, June 10 – Egypt has fully settled arrears owed to foreign oil and gas companies, a development the government says marks a major milestone in efforts to revive investment and boost energy production.
Speaking on Wednesday, Egypt’s Minister of Petroleum and Mineral Resources, Karim Badawi, described the repayment of outstanding obligations as a turning point for the country’s energy sector.
According to Badawi, the settlement removes a key barrier to investment and strengthens confidence among international energy companies operating in Egypt.
“The payment of the arrears restores investor confidence and paves the way for increased upstream activity and accelerated project development,” Badawi said.
Egypt had accumulated approximately $6.1 billion in arrears to foreign oil companies by June 2024, largely due to a prolonged foreign exchange shortage that delayed government payments and affected investment across the sector.
The payment challenges contributed to slower exploration activity and declining natural gas output at a time when Egypt was seeking to maintain its position as a regional energy hub.
Although foreign exchange conditions have improved in recent months, some energy companies had previously indicated that payment delays continued to affect investment decisions.
The government now believes that clearing the outstanding obligations will encourage fresh capital inflows into the sector and support increased exploration, drilling and field development activities.
Officials expect the move to be particularly important for large-scale offshore projects in the Mediterranean Sea, where exploration and development require substantial long-term investment commitments.
Egypt has been working to attract additional investment into its oil and gas industry as it seeks to reverse declining domestic production and strengthen energy security.
The country has also intensified efforts to expand exploration activities, develop new gas discoveries and increase production from existing fields.
Analysts note that restoring confidence among international energy companies is critical to achieving those objectives, particularly as global competition for energy investment continues to intensify.
The settlement of arrears is therefore expected to improve Egypt’s attractiveness as an investment destination while supporting the government’s broader strategy of increasing hydrocarbon production and enhancing export potential.
With payment obligations now resolved, policymakers hope the sector can enter a new phase of growth driven by higher exploration spending, accelerated project execution and stronger partnerships with international energy firms.
