Egypt's Oil Minister Says $10B Gas Project With BP Restarted
Paying Back Companies
Egypt's new president Abdel Fattah al-Sisi may soon be forced to tackle challenges in the sector in order to boost production and draw back wary investors.
But given that power cuts and long lines at fuel stations have stoked public anger in recent years, he will have to act carefully when reforming the wasteful subsidies system that accounts for a quarter of government spending.
In another move that could help improve investor confidence, Ismail said Egypt would pay $1.5 billion of the money it owed to foreign energy companies by the end of 2014.
The latest government figures put Egypt's debts to foreign oil companies operating there at $5.7 billion, but officials including Ismail acknowledge that debts are mounting even as the government pays off what it owes now.
The government has promised to pay companies including BG Group and BP $3 billion by the end of 2017 as it tries to lure back investors to help it develop its reserves.
In April, Ismail said Egypt would pay about $1 billion "within two months" but the government has not yet announced that it has paid.
BP, one of the largest foreign investors in Egypt, had initially planned to start production at its North Alexandria project this year, the minister said. Ismail said a delegation from BP would arrive on July 17 for talks with the government.
A BP spokesman declined to comment the project.
(Reporting by Abdel Rahman Adel; Writing by Maggie Fick; Editing by Louise Ireland and Mark Potter)
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