This week, Egypt intends to pay out $1.5 billion (B) of the $6.3 B it owes to oil firms, furthering a government plan to boost the nation's economy after three years of political chaos.
The chairman of Egyptian General Petroleum Corp. (EGPC), Tarek El Molla, said on Monday, "Today, we are reimbursing $1 B to the foreign partners, and the rest during this week."
The government approved the $1.5 B payment on December 4. It intends to repay another $3 B in monthly payouts through the end of 2017, in an effort to encourage energy-sector investment, especially by foreign companies.
Of the $1.5 B initial payment, $1.2 B will be paid in US dollars, and the remaining $300 MM will be paid in Egyptian pounds.
According to financial statements by BP, BG Group, Edison SpA, TransGlobe Energy, Eni and Dana Gas, Egypt owed the companies more than $5.2 B at the end of 2012.
The government has delayed payments to oil firms since at least 2011, due to political upheaval caused by the overthrow of President Hosni Mubarak in that year. The government turmoil has crippled the economy, frightened investors and hurt tax revenues.