Egypt cuts accumulated oil debt to $4.9bn

Egypt has paid $1.5 billion of its debt to foreign oil and gas firms after it announced a LE10 billion($1.4 billion) loan signing with four Banks. This payment has reduced the country’s debt owed foreign oil firms to LE34.3 billion ($4.9 billion).

“The government aims to reduce the country’s debt to foreign oil and gas companies in order to motivate them to increase their exploration operations to increase oil and gas production in the country and minimize import,” said Sherif Ismail, Egypt’s Minister of petroleum.

The loan was secured from National Bank of Egypt (NBE), Commercial International Bank (CIB), the Arab African Bank and Qatar National Bank (QNB) and will be repaid over a period of four years with a one year grace period.

Egypt earlier made payments in 2013 to a number of energy firms totalling $1.5 billion and promised to pay $3 billion by 2017. This payment was made after Kuwait, U.A.E and Arabia promised $12 billion in grants, loans and fuel shipments to support Egypt’s ailing economy.