REFILE-Egypt debts to oil firms highlight subsidies struggle

Fri Apr 12, 2013 11:24am EDT
 
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* Oil firms reveal Egypt owes them $5 bln, half overdue

* Apache says has $1 bln political risk insurance for Egypt

* Upstream investments still strong, to exceed $8 bln

By Dmitry Zhdannikov

LONDON, April 12 (Reuters) - Egypt owes at least $5 billion to oil companies, half of it overdue, corporate reports have revealed, in a development highlighting the country's struggle to meet soaring energy bills while subsidising prices to avoid public unrest.

Egypt has been delaying payments to firms producing oil and gas on its territory as it has struggled with dwindling currency reserves, rising food bills and sliding tourism revenues since the 2011 revolution that overthrew Hosni Mubarak.

Most oil firms hope to recoup the debts in full, but they acknowledge it could take years. While they are still planning to invest in new projects in Egypt that will help it avoid an energy meltdown, the debt situation remains a challenge.

The government's delay in paying its debts to oil and gas producers could hold back investment in the sector and potentially endanger Egypt's energy security.   Continued...