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Egypt says to pay $1.5 bln arrears to foreign oil firms

In an effort to protect foreign investors in Egypt, government repays arrears to oil companies and reconicliates with Gulf investors, El-Beblawy

Reuters, Wednesday 4 Dec 2013
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Egypt promised on Wednesday to pay $1.5 billion of the $6 billion it says it owes oil firms, hoping the announcement made at an investment conference will revive confidence in an economy battered by nearly three years of political upheaval.

"There is approval to pay $1.5 billion," Prime Minister Hazem El-Beblawi told the gathering designed to lure investment from Gulf Arab states and businessmen.

The oil-producing countries rallied behind Egypt after the army ousted President Mohamed Morsi of the Muslim Brotherhood in July, pledging billions of dollar in financial support.

Political uncertainty since a popular uprising ousted autocrat Hosni Mubarak in 2011 has frightened away tourists and investors, cutting tax revenues and foreign currency inflows.

That has increased pressure on the government to get oil firms investing again in extraction and exploration and lure both Arab and Western investors.

Egypt has repeatedly promised to repay arrears to the oil companies since Mursi's removal, which was welcomed by Gulf states fiercely opposed to the Muslim Brotherhood.

Finance Minister Ahmed Galal, addressing the same conference, said the central bank would supply the dollars needed to pay the firms.

Financial disclosures by firms including BP PLC, BG Group, Edison SpA and TransGlobe Energy show Egypt owed them more than $5.2 billion at the end of 2012.

In the week after the army takeover, Saudi Arabia, Kuwait, and the United Arab Emirates pledged a combined $12 billion in grants, interest-free loans and oil products.

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