Tuesday 21 February 2017

Egyptian government agrees to pay arrears owed to two Irish oil exploration firms

Published 23/07/2014 | 17:10

Geoff Probert, head of technical at Petroceltic
Geoff Probert, head of technical at Petroceltic

TWO Irish oil exploration firms are expecting a cash boost after the Egyptian government vowed to pay all arrears owed foreign oil within three years.

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Petroceltic and Circle Oil are owed a combined $109m (€80m) from the Egyptian oil authority EGPC.

The State aims to accelerate repayments of arrears in the oil and gas industry, which stands at almost $6bn, according to sources. It previously said it would repay half that amount by the 2017 timeframe

Davy stockbrokers said the reports are a further sign of the rehabilitation of the oil and gas industry in Egypt.

“For Petroceltic, the improvement in arrears is already underway with roughly half of the c.$80m debtor position on late payment,” said analyst Job Langbroek.

“This compares with a total receivable position of around $120m at the end of 2012.”

About half of the $80m owed to Petroceltic, which produced 20,354 barrels of oil per day in Egypt, is overdue.

The firm recently revealed plans to raise $100m to expand exploration activity there and in Kurdistan, despite writing off $37m due to unsuccessful wells in Egypt, Bulgaria and Romania last year

Circle, which produced more than 11,000 barrels of oil per day there, is owed $29m, with $21m overdue.

Receivables decreased by 11pc last year, despite a 16pc increase in oil sales for 2013.

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