The government will pay out USD 1 bn of arrears owed to foreign energy companies early next month, a senior government official told EnterpriseAM. This will be followed up by the government settling all dues owed to foreign energy companies operating out of Egypt by the end of the year, we were told. As a show of the government’s commitment to settling its dues to energy companies operating in Egypt, this payment is expected to encourage energy players to ramp up investments in exploration and production, particularly in the West Mediterranean and the West Delta, the source added.

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This follows the Madbouly government’s USD 1 bn disbursement in early January, building on a similar payout made last November, according to previous reports. The government has since agreed on a repayment schedule with international oil companies, with payments rolling out through June 2025.

Energy security remains a top priority, with the government moving to plug its natural gas supply gap of around 2 bn cubic feet per day by locking in long-term LNG contracts, ramping up exploration, and pushing renewables, a government source previously told us, adding that there are new reserves potentially coming online as soon as March.

It’s probably not a coincidence that the Egypt Energy Show is kicking off today, with the government eagerly hoping to ink agreements to further investment in the sector and up production to help close the gap between domestic supply and demand.

REMEMBER- Following a costly few months of energy imports to bridge the gap between local production and demand, the Oil Ministry has been on a mission to start increasing local energy production in 2025. In addition to partially clearing arrears to international oil companies since the EGP float in March, the Oil Ministry is offering new incentives to energy players that include increasing production sharing ratios with foreign companies in exchange for new investments, enhancing exploration efforts, and increasing extraction rates with the aim of boosting local production.

THE INCENTIVES SEEM TO BE WORKING-

#1- Dana Gas has decided to restart energy exploration after receiving some of its outstanding dues from the government, two unnamed sources told Asharq Business. The Emirati energy giant will begin exploration in March under a previously announced USD 100 mn program inked with the Egyptian General Petroleum Corporation. The program includes the drilling of 11 new wells and is expected to add 80 bn cubic feet of gas reserves.

Outstanding arrears have long been a sticking point for Dana Gas, with the company announcing in November that it is putting on hold its USD 100 mn project to develop production until it receives USD 24 mn out of a total USD 59 mn of outstanding dues owed by the Madbouly government. The government settled an additional USD 20 mn of its dues owed to Dana Gas in December, according to Asharq Business’ sources.

#2- Global energy giant BP kicked off production from the second development phase of its Raven natural gas field in its North Alexandria offshore concession, the energy firm said in a statement. The new wells will produce some 220 bn cbf of gas and 7 mn barrels of condensate. The firm completed the drilling of two gas wells in the Raven field last month — it invested USD 400 mn in the drilling operations.

What they said: “The focus of the Raven Infills project has been to fight natural decline and increase production while maximizing our existing infrastructure to meet Egypt’s domestic market demand at pace,” BP Regional President for the Middle East and North Africa Nader Zaki said.

ALSO IN ENERGY NEWS-

United Energy Group’s (UEG) acquisition of Apex International Energy’s Egypt operation came in at USD 150 mn, according to a disclosure (pdf) from the company to the HKEX. The agreement — which came to light last week — will see UEG add Apex’s eight onshore concession areas to its currently five concession-strong portfolio.

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