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PM: Egypt Owes Foreign Oil Companies $6 Billion

Egypt's then-Finance Minister Hazem el-Beblawi addressing media during meeting of Gulf and Arab Finance Ministers, Abu Dhabi, Sept. 7, 2011.
Egypt is close to agreeing to a schedule for repaying $6 billion in outstanding debt to foreign oil companies, Prime Minister Hazem el-Beblawi said in a newspaper interview published on Thursday.

Beblawi also told Al Masry Al Youm that reaching an agreement would lead to a rise in investments from the companies to $15 billion within two years.

The Egyptian state, racked by political and economic turmoil since the ouster of Hosni Mubarak in February 2011, has been struggling to meet soaring energy bills caused by high subsidies on fuel products for the country's 84 million-plus population.

"We are in debt to foreign oil firms for around $6 billion, which is what led them to stop investing. We are on the verge of reaching an agreement with them to schedule the debts," Beblawi said. "Reaching a settlement will lead to a rise in investment from foreign [oil] firms within two years to $15 billion."

Earlier this month, Oil Minister Sharif Ismail said Egypt was preparing a timetable for repaying arrears on debts it owes to foreign companies in order to encourage them to continue investing in exploration and development.

Financial disclosures by firms including BP PLC, BG Group, Edison SpA and TransGlobe Energy show Egypt owed them more than $5.2 billion at the end of 2012.

Dana Gas, owed $230 million by Egypt in overdue payments for gas supplies, said it was in active dialogue with the government over the debts.