What is happening in the oil and gas market in Egypt? Why did the government pay one billion dollars in dues to foreign oil companies? Will this step have an impact on the discovery and exploration market in Egypt? In this video, we will talk about the importance of this step in the field of energy and why it happened now? What can you expect from the market after that?
During the past few days, the government paid a billion dollars to foreign oil companies, out of a total debt amounting to about 2 billion dollars
Why is this decision important? Why is the government particularly interested in paying the dues of these companies at the present time?
The story has a background related to the state of the gas and oil market in Egypt now. Egypt was for a period within the “club of gas exporting countries,” but due to the decline in production, we reached a stage of needing imports again, and this is after production decreased to about 4.6 billion cubic feet per day, while Egypt’s needs reach For about 6.2 billion cubic feet
The step that has taken place now comes to encourage international exploration companies to expand their investments in the Egyptian market once again. This demonstrates that the government is very keen on preserving Egypt’s investment reputation, especially in the field of energy. And when these companies see that their dues are disbursed on a regular basis, It makes it feel confident and secure, and it can invest more in exploration and discovery operations and expand its work in Egyptian fields.
The important question… Why is this step happening now? Why is the government interested in paying a large portion of the debts?
The simple answer indicates that the government wants to ensure that it supports the energy sector strongly and is trying to provide dollars for strategic projects, and this may be an indication of the strength of the efforts in providing hard currency, which has become an essential element in supporting the Egyptian economy during the current period.
Also, the decline in gas production and Egypt’s return to imports represents additional pressure on the country’s dollar reserves… Therefore, when the government pays these companies a portion of their dues in dollars, this is a clear message that there are realistic steps to stabilize the market… A step like this could be a clear signal to foreign companies that they are completing their investments in Egypt takes it seriously, especially since the energy and gas sector now needs international partners to contribute to increasing production and reviving new fields, and the government already aims to raise production to reach 5 billion cubic feet by the end of the current year.
This is also not just a goal on paper. It represents a real attempt to return to our position as a natural gas exporter and reduce dependence on imports, which could put more pressure on the economy.
But I wonder if this step will have another impact on the market?
The truth is that paying these dues can encourage more international companies to enter the Egyptian market and contribute to prospecting and exploration operations. When companies see that Egypt pays their dues on a regular basis, this makes them feel that the Egyptian market is a safe place for investment, and this brings more dollars into the market, provides job opportunities, and encourages technological progress in the energy sector.
The issue is also related to securing Egypt’s energy needs in the long term, because if production continues to decline, this means that we will have to import more, and this represents pressure on the economy.. But if we are able to increase production and achieve self-sufficiency again, this means that we maintain the stability of the economy, and this is part Essential to the government’s plan to secure energy sources and support the Egyptian economy
