Egypt’s arrears on the rise

CAIRO, April 6, 2016 – Egypt’s debts to foreign oil companies operating in the country have grown by USD 200 million over the past three months to reach USD 3.2 billion, a Ministry of Petroleum official said on Wednesday. The ministry had earlier vowed to pay all its outstanding arrears by the end of 2016.

Debts to foreign oil companies have been a persistent problem for the Ministry of Petroleum, which in several instances over the past years failed to make good on its promises to pay its outstanding arrears. The latest announcement also casts doubts on Egypt’s ability to reduce debts, as it had originally intended to shrink its burden to USD 2.5 billion by year-end 2015. By January 2016 however, debts had grown to USD 3 billion, up from USD 2.7 billion in October.

The latest USD 200-million increase in outstanding arrears coincides with dwindling foreign currency reserves, which have more than halved to USD 16.56 billion. A financing deal with Saudi Arabia, rumoured to be in the range of USD 20 billion, is expected later this week, officials told Reuters on Tuesday.

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