Egypt has paid about $5 billion in overdue bills to foreign oil and gas Partners as it works to reduce outstanding arrears and stabilise its energy Sector.
In a statement on Wednesday, Prime Minister Mostafa Madbouly said the government aims to cut remaining arrears to about $1.2 billion by June 2026 while continuing to meet current monthly payment obligations.
The payments form part of a broader effort to ease financial pressure on international companies operating in Egypt after prolonged delays caused by foreign currency shortages.
Madbouly stated that arrears stood at about $6.1 billion as of June 2024, adding that the recent payments reflect a shift toward restoring regular settlement of outstanding obligations.
“Despite the pressures, the State has continued to honour monthly invoices owed to foreign Partners,” he said.
The foreign currency squeeze had previously forced Egypt to delay payments to international oil companies (IOCs), leading to slower investment activity and reduced upstream spending.
As a result, Gas output declined, pushing the country to rely more heavily on imports from neighbouring Israel and Liquefied Natural Gas cargoes from global markets from 2022.
In addition, the government sees the move as necessary to rebuild confidence among foreign energy firms and encourage renewed Capital Investment in exploration and production.
The repayment push gained momentum after Egypt signed a $35 billion agreement in 2024 with the United Arab Emirates for development rights along a prime stretch of the Mediterranean Coast.
Following the deal, Authorities began channelling foreign currency inflows toward clearing long standing debts owed to oil and gas operators.
Gas production and supply pressures
Egypt’s natural gas production has shown modest month on month improvement but remains below earlier levels.
Data from the Joint Organisations Data Initiative showed gas output reached 3,635 million cubic metres in October last year, up from 3,525 million cubic metres in September.
However, production was still lower than the 3,851 million cubic metres recorded in October 2024. The lower output has kept pressure on the government to secure imports to meet power generation and industrial demand.
Authorities view clearing arrears as essential to unlocking delayed projects and ensuring existing fields receive adequate investment to lift output over time.
Government outlook on payments and energy stability
On its part, the government indicated that maintaining regular payments is now a priority to prevent a repeat of earlier disruptions.
Officials explained that the arrears reduction plan is designed to balance fiscal discipline with the need to support Energy Security.
Moreover, settling debts is expected to improve relations with foreign operators and reduce financing costs for future Projects.
The government has also linked its payment strategy to broader economic reforms aimed at attracting Foreign Investment and strengthening the Balance Of Payments.
