Dana Gas has signed a revised deal with Egypt that will help it to recover most of the $280 million it is owed by the government for exploration and production assets in the country, the United Arab Emirates energy company said.
Political turmoil and violence since the 2011 revolt that ousted Egyptian leader Hosni Mubarak has hit the economy hard and Egypt has struggled to pay foreign companies for gas, with some major gas projects grinding to a halt at a time when generous state subsidies are stoking demand.
Dana says it is owed $280 million in outstanding payments but that a new Gas Production Enhancement Agreement (GPEA) will permit it to drill 37 new wells and redevelop existing ones, providing additional condensate production that it can sell on the international market.
The GPEA-generated revenue will reduce the outstanding receivables to nominal levels by 2018, Dana said on Tuesday.
The company has had problems recovering payments in both Egypt and Iraqi Kurdistan because of political turmoil and said in August that it was working with the Egyptian government to agree a new deal.
On Monday, the UAE firm said it had won exploration deals for two onshore gas blocks in Egypt.