Ahmed Kamel – Egypt Daily News
Egypt has paid around $5 billion in overdue payments to foreign oil and gas partners and is aiming to reduce its remaining arrears to about $1.2 billion by June 2026, Prime Minister Mostafa Madbouly said, as the government moves to restore investor confidence and reverse a decline in domestic energy production.
Speaking in a government statement, Madbouly said outstanding arrears stood at $6.1 billion as of June 30, 2024, adding that the state is now also meeting its monthly payment obligations to international energy companies operating in Egypt. The prime minister described the repayment drive as a key pillar of Egypt’s strategy to reinvigorate investment in the hydrocarbons sector and stabilize energy supplies.
Egypt’s arrears accumulated during a prolonged foreign currency shortage that forced the government to delay payments to international oil companies. The situation led several firms to scale back investment and exploration activity, contributing to a steady decline in natural gas output. As domestic production fell, Egypt was forced from 2022 onward to rely increasingly on imports, including pipeline gas from neighboring Israel and costly liquefied natural gas cargoes, despite having been a net gas exporter for five consecutive years.
Momentum shifted in 2024 after Egypt concluded a landmark $35 billion deal with the United Arab Emirates granting development rights for a prime stretch of the Mediterranean coast. The inflow of foreign currency from the deal helped ease pressure on state finances and enabled Cairo to accelerate repayments to energy partners. The government has since announced that $1 billion in back payments was made recently, bringing the total paid since June 2023 to approximately $5.5 billion.
Despite these efforts, production remains below previous levels. According to data from the Joint Organizations Data Initiative, Egypt produced 3,635 million cubic meters of natural gas in October, up slightly from 3,525 million cubic meters in September but still down from 3,851 million cubic meters recorded in October 2024. Current output, estimated at around 4.2 billion cubic feet per day, remains insufficient to fully meet domestic demand.
Officials say clearing arrears is essential to encouraging international companies to increase drilling, resume delayed projects, and commit fresh capital. The government hopes that renewed investment will help lift production levels, restore Egypt’s position as a regional energy hub, and reduce its dependence on volatile global LNG markets.
Energy self-sufficiency has become a strategic priority for Cairo, both to ease pressure on foreign currency reserves and to support broader economic reforms. By stabilizing relations with foreign oil and gas partners and signaling a more predictable payment environment, the government is betting that higher production and lower import bills will strengthen Egypt’s energy security and economic resilience over the medium term.
