• Egypt will repay $1.3 billion in arrears to foreign oil companies by June 2026.

• Total outstanding debt peaked at $6.1 billion in June 2024 due to foreign currency shortages.

• Authorities aim to restore investor confidence and boost domestic hydrocarbon production.

Egypt announced that it will settle $1.3 billion in arrears owed to foreign oil companies by June, confirming an accelerated payment schedule as it works to meet its financial commitments. The website Asharq Al-Awsat English reported the development on Sunday, March 22.

Authorities stated that these payments form part of a broader effort to reduce accumulated debt to international oil and gas operators. Total arrears reached approximately $6.1 billion at end-June 2024 after prolonged constraints on access to foreign currency.

Since then, the government has made several payments and has aimed to gradually bring outstanding balances down to more sustainable levels. Under previous guidance, authorities expected a residual balance of about $1.2 billion to remain at the initial deadline.

The newly announced acceleration changes that timeline as Egypt integrates monthly payments to foreign partners more effectively into its budget management.

This shift reflects a relative improvement in foreign currency availability, supported by rising foreign exchange reserves and macroeconomic adjustments. Consequently, authorities have regained control over the pace of repayments after a period during which external imbalances forced them to delay some obligations.

Egypt is pursuing a dual objective through the repayment of energy-sector debt. On the one hand, authorities aim to restore foreign investor confidence and encourage renewed exploration and drilling activity. On the other hand, they seek to increase domestic hydrocarbon production.

Domestic output has declined since its peak in 2021, which has constrained local supply capacity and increased reliance on imports, particularly liquefied natural gas.

The continuation of this repayment trajectory will depend on Egypt’s ability to maintain adequate foreign exchange reserves. Investment trends in the oil and gas sector will also serve as a key indicator, alongside developments in domestic energy demand.

This article was initially published in French by Olivier de Souza

Adapted in English by Ange J.A de Berry Quenum