Arrears to oil producers are now below pre-2011 levels, El Molla promises no more subsidy cuts this calendar year
Egypt’s arrears to oil producers have fallen to their lowest levels yet, coming in at USD 1.2 bn at the end of FY2017-18, lower than the previous trough of USD 1.35 bn in 2010, Oil Minister Tarek El Molla announced on Thursday. Egypt intends to fully repay amounts owed to international oil companies by the end of 2019, he said. Total arrears are down from USD 2.1 bn in February.Sources had said earlier this month that the EGPC was planning to deliver USD 200-500 mn in payments to producers before the end of September 2018.
The oil and gas sector is expected to drive economic growth this fiscal year as production from the Zohr gas field ramps up and focus turns towards turning Egypt into a regional export hub, El Molla said at a Thursday press conference (watch, runtime: 16:13). Production from Zohr is on track to hit 1.75 bcf/d by the end of August, up from a current 1.2 bcf/d and on its way to reach c. 2 bfc/d by the end of 2018. Exploration work on the Noor gas field is also expected to start in two months’ time, according to the minister.
No more fuel subsidy cuts this year: El Molla promised no further cuts to fuel subsidies this year, Ahram Online reports. “There will be no hike in fuel prices in Egypt during this [calendar] year,” El Molla said late Friday in a phone in to Mehwar TV. Egypt had hiked fuel prices by around 50% on average for consumers and industry late last month, the third such move since the IMF Extended Fund Facility was signed.