Egypt’s overdue debt to foreign oil companies rose to $3b at the end of December 2015, up from $2.7b at the end of October, said Petroleum Minister, Tarek El Molla in an interview with Reuters. El Molla did not provide information on the reasons for the increase. The trend is disappointing, as the Ministry had previously set the goal of reducing outstanding payments to $2.5 by the end of 2015 and fully eliminating arrears at the end of 2016.
Egypt’s inability to pay its debts to oil firms operating in the country has reduced production at a time when Egypt’s energy needs are increasing. The delays have discouraged future investments in the sector, as firms are wary of the Egyptian government’s risk. Payments have been severely delayed also by Egypt’s foreign currency shortage, as economic difficulties have led to a 50% reduction in foreign currency since 2011.