CAIRO - Egypt will settle $1.3 billion in arrears to international ​oil companies ⁠by June, the petroleum ministry said on Saturday, ‌accelerating its previous timetable for repayments.

Egypt had accumulated about $6.1 billion in ​arrears to foreign oil companies by June 30, 2024 due to ​a prolonged foreign currency ​shortage that delayed payments and weighed on investment and gas output. The shortage has since ⁠eased, though some companies have said that arrears have been once again accumulating.

Under its prior timetable, announced in January this year, the government had expected to still have ​arrears of ‌some $1.2 billion by ⁠June.

Clearing debt ⁠may encourage foreign oil and gas companies to resume drilling, which ​would boost local production that has been ‌steadily falling since peaking in ⁠2021.

More local production would help the North African nation to reduce its energy imports.

Egypt's energy imports bill has more than doubled since the outbreak of the U.S.-Israeli war with Iran and the government is considering asking employees to work remotely and closing shops by 9 p.m. (1900 GMT) five days a week to ‌cut energy consumption.

According to a recent note ⁠by the Institute of International Finance, the ​additional cost of oil could lead to an increase in expenditure of between 0.2% and 0.55% of the country's ​GDP at ‌a time when its economy is ⁠barely recovering from successive shocks.

(Reporting ​by Mohamed Ezz; Editing by Sharon Singleton)