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Sun 3 Jan 2016 02:46 PM

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Egypt sees arrears owed to oil firms rise to $3bn at end-2015

Petroleum Minister said in September country aims to pay them off completely by the end of 2016

Egypt sees arrears owed to oil firms rise to $3bn at end-2015
(Getty Images)

Egypt's outstanding arrears to foreign oil companies rose to
$3 billion at the end of December 2015 from $2.7 billion at the end of October,
Petroleum Minister Tarek El Molla told Reuters on Sunday.

The
ministry had said in September that Egypt aimed to reduce the arrears owed to
foreign oil companies to $2.5 billion by the end of 2015 and to pay them off
completely by the end of 2016.

Delays
in paying back foreign petroleum companies had discouraged investment in the
sector, but a drive to increase the price paid for domestic production and pay
back arrears had encouraged new contracts signed in 2015.

El
Molla did not provide further detail on why total arrears have risen since
November.

Egypt
has run short of hard currency since a 2011 uprising drove tourists and
investors away. Reserves almost halved to $16.4 billion by the end of November.

Once
an energy exporter, Egypt has turned into a net importer because of declining
oil and gas production and increasing consumption. It is trying to speed up
production at recent discoveries to fill its energy gap as soon as possible.

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