Egypt announced on Wednesday that it has paid all outstanding debt to foreign oil companies and said this would spur investments in the hydrocarbon sector.

Egypt’s arrears to the UK's bp, Italy’s Eni and other global oil firms peaked at nearly $6.1 billion in June 2024 and officials have said this posed a major obstacle to development of the country’s oil and gas resources.

“Egypt has now achieved an unprecedented strategic milestone by completely settling outstanding payments to its oil and gas investment partners, bringing them down to zero for the first time in years,” petroleum and mineral resources minister Karim Badawi said in a statement on the ministry’s website.

“This achievement is a turning point in the history of the Egyptian oil and gas sector, ushering in a new era of confidence, investment, growth, and increased production.”

Badawi said debt payment is not merely a financial settlement, but a fundamental solution to one of the most significant challenges the sector has faced in recent years. “The accumulation of these outstanding payments had a direct impact on investment rates, drilling and exploration programs, and development, which in turn affected domestic oil and gas production levels,” he said.

The Minister pointed out that the full settlement of these arrears has significantly restored investor confidence in Egypt’s petroleum sector and removed one of the key obstacles to the inflow of capital and new investments.

Egypt has been locked in a drive to reverse a decline in its oil and gas production and resources due to low investments and maintenance work over the past years.

In January, Badawi said there is a plan to unveil a new package of incentives to encourage oil companies to intensify operations and to woo fresh investments in the hydrocarbon sector.

(Reporting by N Saeed; Editing by Anoop Menon)

(anoop.menon@lseg.com)

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