CAIRO: Egypt has started paying off dues owed to foreign oil and gas companies operating in the country, the government said on Tuesday, with sources saying that up to $1.5 billion had been set aside for the payments. 

A cabinet statement said the payment process that had already begun accounted for about 20 percent of arrears owed to the companies, adding that the remainder would be paid off through a scheduled plan. 

Egypt began accumulating arrears to companies and contractors during a long-running foreign currency shortage. The shortage has eased over the past month after the announcement of a record investment deal, a devaluation and an expansion of Egypt’s current International Monetary Fund programme. 

A source close to oil companies said Egypt had informed at least one of the companies that it would start paying back up to $1.5 billion of the overall arrears as soon as Tuesday. 

A separate industry source said there was information that $1.5 billion had been set aside for oil co-receivable payments and that the idea was to pay each 20 percent of their overdue receivables. 

“Some companies are apparently going to receive this money today,” the industry source added. 

Egypt’s finance and petroleum ministries did not respond immediately to requests for comment. 

Egypt’s chronic foreign currency shortage worsened in early 2022, triggering some restrictions on imports and government payments. 

After a deal announced late last month with UAE sovereign fund ADQ, Egypt says it has received $10 billion out of $24 billion of new funds for the rights to develop prime land at Ras El Hekma on the Mediterranean coast. 

The government also agreed on an expanded $8 billion financial support package with the IMF on March 6 and pledges of additional financing from the World Bank and the EU. 

The government has not said how much money it owes companies. Egypt had accumulated billions of arrears to foreign oil companies a decade ago, which it began to pay off after another devaluation and IMF deal in 2016.