Egypt has paid around US$5 billion of outstanding arrears owed to foreign oil and gas partners and is committed to settling remaining dues as well as regular monthly invoices, Prime Minister Mostafa Madbouly said.
Speaking during a weekly cabinet meeting at the government headquarters in the New Administrative Capital, Madbouly said arrears to foreign partners in the petroleum sector stood at about US$6.1 billion as of June 30, 2024.
He said those liabilities are projected to fall to around US$1.2 billion by June 30, 2026, a level he described as normal for the sector, implying total repayments of roughly US$5 billion over the two-year period.
Egypt’s ability to clear arrears has been closely watched by international oil companies, which have repeatedly flagged delayed payments as a key obstacle to investment and production growth in the country.
The government has sought to reassure investors that payment discipline has improved, as it works to revive domestic hydrocarbon output and position Egypt as a regional energy hub.
Madbouly said the repayments form part of a broader strategy endorsed by President Abdel Fattah al-Sisi to strengthen Egypt’s role in regional oil and gas trade, including through expanded onshore and offshore exploration.
He referred to a recent meeting chaired by the president to review progress on the country’s energy strategy, which aims to leverage Egypt’s existing liquefied natural gas (LNG) infrastructure and geographic position to serve regional and international markets.
Egypt has been seeking to boost exploration activity after natural gas production declined in recent years, contributing to power shortages and forcing the country to increase energy imports.
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Madbouly said there were directives to intensify exploration efforts to expand the scope of new discoveries and build on previous successes. He added that the government was working to provide additional incentives and facilities to investors in the petroleum, gas and mining sectors to attract capital and increase output.
“These efforts aim to raise production levels to meet growing domestic consumption and support development needs,” Madbouly said, without giving further details on the incentives under consideration.
Egypt’s energy sector has faced mounting pressure amid rising demand, a weaker currency and efforts to stabilise public finances under an economic reform programme backed by the International Monetary Fund.
The country relies heavily on foreign energy companies to develop and operate its oil and gas fields, particularly offshore in the Mediterranean, where major discoveries such as the Zohr gas field have played a key role in boosting output in recent years.
Industry executives have said that timely payments are critical to sustaining investment, particularly as global competition for upstream capital intensifies and companies prioritise projects with clear fiscal terms and predictable cash flows.
Madbouly said the Egyptian state remained committed to paying the dues of foreign petroleum partners according to a defined timetable, while also ensuring that monthly payment obligations are met on an ongoing basis.
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The government has previously said reducing arrears would help unlock new investment and accelerate production, improving energy security and easing pressure on foreign currency reserves.
Egypt has taken steps in recent months to improve the investment climate, including reforms to fuel pricing, foreign exchange policy and energy sector regulation. Authorities say these measures, combined with payment discipline, are intended to restore confidence among foreign investors.
While the pace of repayments has been welcomed by industry participants, analysts say sustained progress will depend on Egypt’s ability to balance rising energy demand with production growth and fiscal constraints.
The government has not disclosed which companies received payments or how the remaining arrears will be prioritised, but officials say maintaining stable relations with international partners remains central to Egypt’s energy strategy.
Egypt’s oil and gas sector accounts for a significant share of government revenue and foreign investment, making its performance critical to broader economic stability as the country seeks to navigate inflationary pressures and external financing challenges.
