Egypt Plan to Pay All Debt to Energy Firms in Six Months

Egypt plans to repay all of its $4.9 billion debt to foreign oil and gas companies within six months, Reuters reported Thursday citing oil ministry statement.

The North African nation hopes this move will help boost exploration and ease energy shortage in coming years.

Gas production has been declining over the years amid rising domestic consumption, but firms have been reluctant to increase investment in exploration and production, particularly in costly offshore areas, until the government repays them, Reuters said.

Egypt plans to borrow $2 billion to help it finance the repayments, seeking to repay 60 percent of the arrears by year-end.

“This offering comes as one of the short-term measures taken by the government to pay the (international oil companies') arrears,” Oil Minister Sherif Ismail said in the statement.

Egypt said in October it had repaid $1.5 billion of the money owed, leaving $4.9 billion outstanding.