Minister of Petroleum and Mineral Resources: Full Settlement of Partner Arrears Opens a New Chapter for Production Growth and Investment Attraction

Eng. Karim Badawi, Minister of Petroleum and Mineral Resources, announced that Egypt has achieved an unprecedented strategic milestone by fully settling all outstanding arrears owed to petroleum and natural gas investment partners, reducing them to zero for the first time in years after they had reached approximately US$6.1 billion in June 2024.

The Minister asserted that this achievement represents a major turning point for Egypt’s Oil and Gas Sector, opening a new chapter built on confidence, investment, growth, and increased production. He highlighted that this accomplishment was made possible through the support and continuous follow-up of H.E. President Abdel Fattah El-Sisi, President of Egypt, as well as the coordinated efforts of the government under the leadership of Dr. Mostafa Madbouly, the Egyptian Prime Minister with full cooperation with all relevant stakeholders.

He explained that clearing the outstanding arrears is not merely a financial settlement, but rather a comprehensive resolution to one of the sector’s most significant challenges over recent years. The accumulation of arrears had directly impacted investment levels, drilling programs, exploration activities, and field development projects, ultimately affecting domestic oil and gas production rates.

The Minister pointed out that the full settlement of these arrears has significantly restored investor confidence in Egypt’s Petroleum Sector and removed one of the key obstacles to the inflow of capital and new investments. This paves the way for a more active phase of upstream activities, field development, and the accelerated implementation of production projects.

He stressed that Egypt’s message to the global investment community today is clear and unequivocal: Egypt honors its commitments, fulfills its obligations, and possesses a genuine determination to support investment by providing a stable, attractive, and mutually beneficial business environment.

He added that Egypt possesses exceptional advantages that position it among the region’s leading energy investment destinations, supported by its strategic geographic location, advanced infrastructure, integrated production and export facilities, extensive technical expertise and skilled human capital, as well as promising opportunities across the Petroleum, Natural gas, and Energy sectors.

The Minister highlighted that, recent months have witnessed a robust resurgence in investment momentum, with partners resuming drilling, exploration, and field development programs at an accelerated pace. This has already translated into increased petroleum activities and higher investment levels across various concession areas.

The Minister pointed out that the development of offshore fields, particularly in the deep waters of the Mediterranean Sea, presents significant technical and investment challenges due to the advanced technologies, substantial capital expenditures, deep water drilling operations, and extensive pipeline and gas transportation networks required to connect discoveries to processing and production facilities. Such projects typically require several years of intensive work before reaching the production stage.

He affirmed that the petroleum sector strategy is based on accelerating the development of discoveries and converting them into production as quickly as possible, maximizing the utilization of Egypt’s natural resources, and adding new production capacities that support the national economy and meet domestic oil and gas market needs.

The Minister stressed that the complete elimination of the outstanding arrears file represents a launching point toward a stronger and more sustainable phase for the Egyptian petroleum sector, based on increasing production, maximizing investments, improving resource utilization efficiency, securing energy supplies, and enhancing the state’s capacity to achieve sustainable economic development.

The Minister concluded his remarks by expressing his appreciation to investment partners for their continued trust in the Egyptian petroleum sector, affirming that this trust was an important factor in overcoming challenges and achieving this accomplishment. He also extended his respect and gratitude to the employees of the petroleum and mineral resources sector for their sincere efforts that contributed to reaching this historic result, which represents the beginning of a new phase of growth and momentum.