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Egypt gov't to borrow $2bn to repay foreign oil companies

Egypt gov't to borrow $2bn to repay foreign oil companies
The Egyptian oil ministry said on Thursday the government plans to repay all of its $4.9 billion debt to foreign oil and gas companies within six months, according to Reuters. The move is aimed at prompting these companies to boost exploration and ease the worst energy crunch in decades. Egypt has delayed payments to oil and gas firms as its economy has been hammered by almost three years of instability since a popular uprising ousted autocrat Hosni Mubarak. Arrears began to accumulate before the revolt, but worsening state finances saw the debts mount to billions of dollars while the government diverted gas earmarked for export to meet domestic demand. The ministry said in a statement that Egypt planned to borrow $2 billion to help it finance the repayments, seeking to repay 60 percent of the arrears by year-end. "This offering comes as one of the short-term measures taken by the government to pay the (international oil companies') arrears," Oil Minister Sherif Ismail said in the statement. He said state oil and gas boards EGPC and EGAS were holding further talks with the companies, in parallel with repayments, to "manage their expectations". Egypt said in October it had repaid $1.5 billion of the money owed, leaving $4.9 billion outstanding.