Egypt announced on Saturday that it will settle 1.3 billion dollar in overdue payments to international oil companies by June, accelerating its earlier timetable.
Previously, the government had expected to still owe about 1.2 billion dollar by that date, according to a Reuters report.
The country had accumulated around 6.1 billion dollar in arrears by mid-2024, largely due to a foreign currency shortage that delayed payments, weighed on investment, and reduced gas production. Some companies have reported that arrears are starting to build up again.
Paying off the debt could encourage foreign oil and gas companies to resume drilling, boosting local production that has been declining since 2021. Increased domestic output could help reduce Egypt’s energy imports, which have become more expensive amid global oil price spikes following the U.S.-Israeli conflict with Iran.
To manage energy demand, the government is considering measures like remote work for employees and closing shops by 9 p.m. on weekdays. According to International Monatery Fund(IMF), higher oil costs could raise government spending by 0.2–0.55 percent of GDP, straining an economy still recovering from successive shocks.
