Egypt is enhancing exploration terms and striving to repay nearly $5B it owes to foreign oil and gas producers as it struggles to prevent them fleeing to more promising prospects elsewhere in Africa.
LONDON, March 6 (Reuters) - Egypt is enhancing exploration terms and striving to repay nearly $5 billion it owes to foreign oil and gas producers as it struggles to prevent them fleeing to more promising prospects elsewhere in Africa.
Cairo needs them to expand exploration and bring new finds to production if it is to keep the lights on and avoid more civil unrest. But investors are hesitant - Egypt pays them barely enough to cover investment costs.
The costing issue has been compounded since the 2011 overthrow of Hosni Mubarak by Egypt's inability to pay foreign firms for existing output and its decision to divert for domestic use the share of gas they normally get to export.
The crisis has left BG Group, a major investor which relies on Egypt for almost a fifth of its output, unable to meet export commitments. The British firm has said it would not invest further until more debts are paid and assurances made.
Low investment has seen Egypt's gas production drop to just over 5 billion cubic feet a day from 6 billion in 2012, said Martijn Murphy, analyst at energy consultancy Wood Mackenzie.
But smaller players say Egypt has raised its game. Its new licensing rounds have attracted bids despite the turmoil.
Ireland's PetroCeltic, which relies on Egypt for 70 percent of its output, was among three firms to sign up for new acreage last month.
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