Egypt says to complete $1.5 bln payment to oil firms this week

Mon Dec 23, 2013 6:37am EST
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* Payment of 1st tranche consistent with government timeline

* $1.2 bln to be paid in US dollars, rest in Egyptian pounds

* Repayment key to restoring investor confidence

CAIRO, Dec 23 (Reuters) - Egypt will complete payment this week of $1.5 billion of the $6.3 billion it says it owes oil firms, a state executive said on Monday, in line with a plan aimed at restoring confidence in an economy hit by nearly three years of political turmoil.

"Today we are reimbursing $1 billion to the foreign partners and the rest during this week," the chairman of state-run Egyptian General Petroleum Corporation (EGPC), Tarek El Molla, told Reuters by telephone.

Approval of the $1.5 billion payment was announced by the government on Dec. 4. The government said the next day it would repay a further $3 billion in monthly instalments until the end of 2017, hoping this will encourage needed investment in the energy sector.

Molla said $1.2 billion of the initial tranche is being paid in U.S. dollars and the remaining $300 million in Egyptian pounds, as officials had indicated.

He said the government was working on a plan for full repayment of the $6.3 billion it says it owes.

Molla had previously told Reuters that "satisfying" foreign partners was essential to the government's strategy of encouraging foreign oil companies in the country to increase exploration and production in exchange for a more rapid repayment of the money it owes them.   Continued...