Egypt targets zero energy arrears by mid-2026 after major paydown

CAIRO - 8 April 2026: Egypt has significantly reduced its outstanding payments to foreign energy partners, with arrears falling from $6.1 billion in June 2024 to around $1.3 billion, as the government continues efforts to restore investor confidence and stabilize the energy sector, Petroleum and Mineral Resources Minister Karim Badawi said.

Speaking at an event hosted by the American Chamber of Commerce in Cairo, Badawi stated that the government’s policy of settling monthly dues while steadily reducing accumulated liabilities has helped resolve one of the sector’s most pressing challenges. He added that authorities aim to fully clear the remaining arrears by the end of June next year, effectively closing the file on partner receivables.

The minister noted that the buildup of unpaid dues had previously constrained investment inflows and contributed to declining oil and gas production levels. However, recent financial discipline and new incentives have helped revive exploration and development activity across the sector.

Looking ahead, Egypt is pursuing a broader energy transition strategy, targeting renewable energy to account for 42 percent of the national energy mix by 2030, alongside plans to expand electricity generation from nuclear power facilities. These measures are expected to gradually reduce reliance on natural gas, which currently represents roughly 60 percent of domestic energy consumption.

Badawi also highlighted ongoing reforms designed to enhance project economics and attract new investment. These include lowering production costs per barrel, revising contractual frameworks, extending concession periods, and launching new investment opportunities near existing production zones to improve returns for partners.

He cited Apache Corporation’s recent success in boosting gas output in Egypt’s Western Desert as a key example of how targeted incentives can deliver tangible production gains.

On the regional front, the minister underscored the strategic partnership with Cyprus, which aims to transport Cypriot natural gas to Egypt for processing through the country’s infrastructure, either for export or for use in local petrochemical and fertilizer industries.

Badawi further emphasized the growing role of advanced technologies in expanding exploration opportunities, pointing to ongoing seismic survey programs in the southern Western Desert and the Red Sea, as well as the adoption of horizontal drilling and hydraulic fracturing techniques.

The government is also developing new contractual and incentive models to attract investment in frontier exploration areas, particularly in the Western Mediterranean, the Red Sea, and the southern Western Desert.

Concluding his remarks, the minister affirmed that Egypt is well positioned to meet energy demand during the upcoming summer season, supported by floating regasification units and liquefied natural gas import infrastructure that ensure reliable supply during peak consumption periods or potential regional disruptions.