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Egypt 'seeking $1.5bn loan to repay oil debt'

August 10, 2014

CAIRO:



Egypt is looking to borrow at least $1.5 billion from local and international banks in order to repay debt owed to foreign oil companies operating in the country, Oil Minister Sherif Ismail said.Ismail told Reuters paying the debt will open the door to foreign investment. He said Egypt owed around $5.9 billion to foreign oil firms as of the end of June.Egypt wants to repay money it owes international firms as part of a scheme seeking to revive confidence in the economy after years of turmoil following the popular uprising that ousted president Hosni Mubarak in February 2011.The minister gave no details on which banks would be approached but said Egypt wanted to borrow money so as not to put pressure on reserves at the country's central bank, which has provided funds for debt payments this year."We'll pay part of the debt in August and schedule the rest," he said.The country has previously said it would repay $3 billion in monthly instalments until 2017 as an incentive to encourage foreign oil companies to increase exploration and production.The government's ability to pay oil companies and contractors has been hit by the political upheaval, which has disrupted investment and tourism and cut tax revenues.Egypt produced 5.1 billion cubic feet per day (bcfd) of gas and 675,000 barrels of oil per day (bpd) during 2013-2014, Ismail said, and was targeting 5.4 bcfd of gas and 695,000 bpd for 2014-2015. Egypt is also experiencing its worst energy crisis in decades due to a continued decline in gas production.




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Source: Oil & Gas News


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