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The Egyptian Ministry of Petroleum announced on Saturday that it will settle $1.3 billion in outstanding arrears to international oil companies (IOCs) by June 2026.
This move represents an acceleration of the government’s previous repayment schedule and aims to restore the confidence of foreign investors.
By June 2024, Egypt’s debt to these firms had climbed to $6.1 billion due to a severe foreign currency shortage, but a recent influx of liquidity has allowed the state to pay down approximately $5 billion of that total over the past year.
Clearing these long-standing debts is seen as a critical step toward revitalising Egypt’s domestic energy sector.
Following a peak in 2021, local oil and gas production has been steadily declining, forcing the country to rely more heavily on expensive energy imports.
To stabilise the country’s energy balance and lessen the enormous financial burden of imported fuel, the government intends to entice international energy giants to resume drilling and exploration activities by settling its accounts.
The urgency of this repayment comes as Egypt faces a ballooning energy bill, which has more than doubled following the outbreak of the U.S.-Israeli war with Iran.
The conflict has disrupted regional gas flows and sent global oil prices soaring, prompting the government to consider drastic conservation measures, such as mandatory remote work for employees and early closing times for shops.
Analysts warn that these rising costs could significantly strain the nation’s GDP, making increased domestic production a vital priority for economic recovery.
