Thursday 27 April 2017

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

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

Sarah Stack

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.

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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