Petroleum Africa
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Monday, September 30, 2013
Egypt is feeling the energy pinch as production unofficially slows due to slow payments from the government. The government now is encouraging foreign operators to increase exploration and production in exchange for a more rapid repayment of the $6 billion it owes them.
Ahmed Galal, Egypt’s finance minister told Reuters in an interview that the government also plans to repay about $363 million to $580 million it owes to local contractors by the middle of next month.
“Right now the rescheduling of the debts is under review in exchange for the companies investing in drilling and exploring for oil and increasing production and such things. And that is beneficial to both parties,” Galal said.”What is on the table is the scheduling of these debts in a way that gives the companies an amount of liquidity that allows them to invest and discover to benefit production.”
Galal said he had been meeting regularly with the oil minister and governor of the central bank to work out where the money will come from and tie the payments to a long-term program to encourage alternative energy and a strategy to get subsidies under control.
The finance minister said that these plans could lead to the eventual restructuring of the country’s entire oil sector, although he did say that foreign firms would begin seeing some of their owed funds soon.
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