Dana Gas said yesterday it would resume limited drilling in Egypt after receiving US$70 million in back-payments from the Cairo government.
The Sharjah-based company is one of the many oil & gas producers who have struggled to recoup outstanding payments for hydrocarbons from the Egyptian government. Dana Gas received the equivalent of $70m in two payments, one in US dollars and one in Egyptian pounds, over the past two weeks. This amounts to 25 per cent of its overdue receivables of $283m as of the end of the first quarter.
“In the light of recent collections received from the Egyptian government, the board considered and approved that additional limited drilling activities should be carried out,” the company said in a filing on the Abu Dhabi bourse.
Dana Gas announced during its first-quarter earnings call that it was reducing spending in Egypt in line with its collections. Patrick Allman-Ward, the company’s chief executive, said: “This doesn’t mean we’re freezing or switching [spending] off completely, but we’re focused on only completing projects that are currently under way.”
Egypt has made payments to international oil companies in line with the IMF’s requirements for a $12 billion extended fund facility that helps address the country’s economic challenges.
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