Egypt To Settle Oil, Gas Dues to Foreign Partners by Mid-2026

Egypt announced an ambitious plan to fully settle outstanding payments owed to foreign partners in its oil and gas sector by the end of June 2026, a move officials say will restore investor confidence and help reverse years of declining production.

Minister of Petroleum and Mineral Resources Karim Badawi said the government is committed to clearing all arrears while maintaining regular monthly payments to international operators. The announcement signals a renewed push by Cairo to stabilize one of its most strategic industries.

According to the ministry, Egypt has already made significant progress, reducing outstanding dues from approximately $6.1 billion in June 2024 to around $1.3 billion today. The remaining balance is expected to be fully settled within the next few months, in coordination with state institutions including the Central Bank of Egypt and the Ministry of Finance.

The effort has received direct backing from Prime Minister Mostafa Madbouly, reflecting the government’s broader strategy to address structural challenges in the energy sector.

Egypt’s oil and gas production has faced mounting pressure in recent years, largely due to reduced investment flows. Officials say the accumulation of unpaid dues to foreign partners had been a key factor discouraging new exploration and development.

Badawi noted that since the second half of 2024, the government has introduced a series of financial incentives and payment mechanisms that have helped curb the decline. These measures, he said, have already contributed to a revival in exploration activity and field development.

“The recent steps have succeeded in halting the production downturn that began in fiscal year 2021/2022,” he said, adding that investor sentiment is now improving.

As part of its recovery strategy, Egypt plans to drill approximately 101 exploratory wells in 2026, within a broader five-year program targeting more than 480 wells. Authorities are also accelerating development of existing fields to boost output in the short term.

The improved investment climate has prompted renewed commitments from major international energy companies. Italy’s Eni has pledged around $8 billion in investments, while BP plans to invest roughly $5 billion. Other players, including Shell and Apache Corporation, are also expanding operations, particularly in the Mediterranean and Egypt’s Western Desert.

The government’s plan comes at a critical moment, as Egypt grapples with rising energy import costs and seeks to reestablish itself as a regional energy hub. Clearing arrears is widely seen as a necessary step to unlocking fresh capital and ensuring long-term production growth.