Egypt clears USD 6.1 bn of IOC arrears in push to restore credibility, attract energy sector FDI

A clean slate

Egypt’s Oil Ministry fully cleared its outstanding arrears to international oil companies, which peaked at USD 6.1 bn accrued since June 2024, according to a statement (watch, runtime: 05:57). The payment fulfills a government promise to the energy sector aimed at helping reverse years of declining domestic production.

Why it matters: Clearing the backlog was the linchpin of the government’s investor-confidence strategy. Combined with sweeter commercial terms, settling the debts has already unlocked a USD 19 bn investment pledge from global energy majors, which sets the state up to hit its USD 6.2 bn sector FDI target next fiscal year. However, even with capital flowing back in, offshore drilling and infrastructure development take years, meaning a significant rebound in domestic output won’t happen overnight.

Around the strait

Kuwait is shipping crude to Asia from outside Hormuz. At least 4 mn barrels of medium-sour Kuwait Export Crude are being marketed to refiners in China and South Korea with the cargoes already positioned outside the strait for prompt delivery, Bloomberg reports, citing traders familiar with the matter. These are the first spot offers to Asia since the regional conflict began.

Tanker activity around Kuwait’s export system is picking up. VLCCs Al Riqqa and Dar Salwa were last tracked loading at Mina Al Ahmadi in late May and early June before their AIS signals stopped transmitting. Their current locations remain unknown, but the timing suggests Kuwait may be building a buffer of export barrels beyond the strait to preserve access to Asian buyers.

Kuwait Petroleum is in discussions with Saudi Arabia and the UAE about expanding their existing pipeline systems to accommodate Kuwaiti crude exports, CEO Sheikh Nawaf Al Sabah said. No timeline was provided, and the stage of the discussions remains unclear.