In the next few weeks, Egypt expects to cut by around half the $3.5 billion in arrears it owes to international oil and gas companies operating in the country, Egyptian Petroleum Minister Tarek El Molla said on Wednesday.
"We have made a lot of progress on paying off arrears," El Molla said at an oil and gas conference in Italy, as quoted by Reuters.
Last month, El Molla said that Egypt planned to soon draft a repayment schedule to pay $3.5 billion in arrears it owes to foreign firms.
According to an International Monetary Fund (IMF) report from January, one of Egypt's main challenges is to restructure the Egyptian General Petroleum Company (EGPC). Because of its difficult financial position, EGPC had started accumulating arrears to international oil companies. These arrears exceeded $6 billion in 2014 with the high global oil prices, but had since declined to $3.6 billion as of end-September 2016.
Apart from paying off part of the arrears to foreign firms, El Molla said today that Egypt expected to finalize within a month a deal to import crude oil from Iraq, at a rate of around 1 million barrels per month.
The minister believes that Egypt could be self-sufficient in oil and gas by the end of next year.
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"Starting from 2019 and beyond we can start talking about exporting," El Molla noted, as quoted by Reuters.
Egypt is home to the giant gas field Zohr in the Mediterranean, whose production start-up is scheduled for this year.
The IMF reckons that the new fields discovered and developed in the Nile delta and in the Mediterranean will help Egypt to increase its gas output from around 4 billion cubic feet per day now to 7.7 billion cubic feet per day over the next three years. This expected output would exceed the country's domestic needs - currently at 5.2 billion cubic feet per day - and "offers an excellent opportunity to save excess quantities for future generations and/or export gas to other countries in the region and elsewhere."
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More