Egypt Aims to Pay $2b to $3b of Debt to Oil Firms

Egypt aims to pay back $2 billion to $3 billion it owes to oil and gas companies by the end of the year, the oil minister said, as the government tries to spur new investment to boost supplies.

The Arab world's most populous country faces its worst energy crisis in decades. Debt owed to energy companies in Egypt totalled $5.9 billion in May, the latest official figure available.

"We are paying off $1 billion to foreign partners during the next few days," Oil Minister Sherif Ismail told a news conference in Cairo.

He said that after the Muslim Eid holiday that ends on Oct. 8, the government will issue a tender to borrow from international banks to repay more of the debt.

Gas production is steadily declining in Egypt while consumption keeps rising but firms are reluctant to increase investment after the government fell behind on payments.

It paid a first tranche of $1.5 billion to companies last December, but the debt continues to mount. Some it was incurred before the 2011 revolt that overthrew Hosni Mubarak.

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