Egypt expects to cut the $3.5 billion it owes to international oil companies by around half in coming weeks, the Egyptian oil minister said on Wednesday.
"We have made a lot of progress on paying off arrears," Tarek El Molla said at an oil and gas conference, Reuters reported.
Egypt is pushing ahead with oil and gas development to meet domestic demand and once again become an exporter. Steps are being taken to improve the foreign investment environment, which will be crucial to continue development of its new mega offshore gas discoveries, such as Zohr in the Mediterranean Sea.
Egypt has undergone a rapid growth of oil and natural gas consumption over the past few decades, driven by increased industrial output, economic growth, energy-intensive natural gas and oil extraction projects and population growth.
Years of energy subsidies have come at a high cost for the country, contributing to a widening budget deficit worsened by a sharp decline in tourism revenues since the revolution, and the inability for Egyptian General Petroleum Corporation (EGPC), the state oil firm, to pay off its debts to foreign operators.
EGPC owes foreign oil and natural gas operators billions of dollars, which has led foreign operators to delay their investments in existing and new oil and natural gas projects.
Egypt in February said it paid its $630 million financial obligation in January to Italian oil and gas company Eni to develop Zohr, the biggest gas fields ever found in the Mediterranean.
The country has recently carried out severe reforms, such as cutting back energy subsidies and floating its currency in order to win the approval for a $12 billion loan from International Monetary Fund to help move the economy back on track of recovery and growth after a few years of political and social turmoil.
Egypt is also attempting to plug an energy shortfall by speeding up investments in developing its oil and gas fields as well as importing.
The minister also said he expected to finalise an agreement to import crude oil directly from Iraq in a month at the most.
"We will import around 1 million barrels a month," he said. Asked when Egypt might become an exporter of oil and gas, Molla said the country would be self-sufficient by the end of 2018, Reuters reported.
"Starting from 2019 and beyond we can start talking about exporting," he said.