Egypt moves to shrink oil arrears to USD 1.2 bn by end of June

The Oil Ministry is moving to clear USD 500 mn in arrear payments to international oil companies before the end of May, a senior government official tells EnterpriseAM. The ministry wants to prevent arrears from piling up again, signaling that intention to keep the investment cycle intact despite regional turbulence.

The move sits inside a broader effort to shrink arrears backlog to some USD 1.2 bn by the end of June. If executed, that would bring total payments to roughly USD 5 bn — a number closely watched by operators who tie future drilling budgets to whether governments pay on time.

Why it matters: Our energy balance sheet is under pressure — the country had already estimated its natgas imports bill at some USD 12 bn before recent regional tensions, with the risk that it could now climb past USD 20 bn. Paying partners on time and pushing refineries to full utilization are two levers we can still control to stabilize and maybe even increase production.

The ministry also plans to run refineries at maximum capacity, including Midor and facilities operated by Suez and El-Nasr Petroleum. By lifting the share of crude processed into fuel products from some 60% today to some 80%, the state is hoping that by refining more domestic crude locally, it can cut the amount it spends on imported petroleum products.