Egypt Clears $6.1Bn in Oil, Gas Arrears to Foreign Partners, Boosting Investor Confidence

Egypt has fully settled all outstanding dues owed to foreign oil and gas production partners, clearing arrears that stood at around $6.1 billion in June 2024, the Ministry of Petroleum and Mineral Resources said on Wednesday.

The ministry said the move, achieved in coordination with relevant state institutions, underscores Egypt's commitment to honoring its financial obligations and is expected to strengthen investor confidence while supporting efforts to attract new investment into the country's energy sector.

The settlement marks one of the petroleum sector's most significant achievements in recent years and aligns with directives from President Abdel Fattah El-Sisi to clear overdue payments, maintain trust with international partners, and encourage exploration, development and production activities.

The ministry said resolving the issue would also reinforce Egypt's ambition to position itself as a regional energy hub.

President El-Sisi has repeatedly emphasized the importance of meeting commitments to foreign partners, viewing it as a key factor in improving the investment climate, ensuring sector stability and encouraging international energy companies to expand their operations in Egypt.

He has also called for creating a more attractive environment for oil and gas investment through incentives aimed at boosting exploration and production and maximizing the use of the country's natural resources.

Prime Minister Mostafa Madbouly said the government had succeeded in paying all outstanding arrears despite challenges linked to regional developments and rising fuel prices.

"Egypt has fully met its obligations and reduced the outstanding balance to zero," Madbouly said, attributing the achievement to continuous presidential support and close coordination among government entities, including the Central Bank of Egypt.

Madbouly described the settlement as a strong signal to current and prospective investors that Egypt remains committed to supporting investment, preserving strategic partnerships and providing a business environment that balances the interests of both the state and investors.

He added that the move would help attract additional investments, support new discoveries and development projects, strengthen energy security and contribute to economic growth in the coming years.

Egypt has been working to revive investor confidence in its energy sector while seeking to increase domestic oil and gas production and expand its role in regional energy trade. The clearance of arrears is expected to improve relations with international energy companies operating in the country and encourage further investment in exploration and production activities.