Egyptian General Petroleum Corporation (EGPC)

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Since its formation in 1962, the Egyptian General Petroleum Corporation has been the major operator in Egypt's extractive industry.[1]

As a subsidiary of the Egyptian Ministry of Petroleum, EGPC is charged with managing the country's upstream activities and is owning and controlling much of Egypt's refining capacity. While EGPC accounts for about 20 percent of Egypt's oil production directly, it mainly works through joint ventures with International oil companies (IOCs).[2] All IOCs active in Egypt require sharing agreements with the EGPC regarding oil production.[3]

EGPC's Debt Problem

After the 2011 Egyptian revolution, EGPC has been facing difficulty in paying debts owed to International Oil Companies (IOC's) due to economic turmoil the country has endured as a result of the social and political unrest. The debt problem is directly linked to the energy crisis that has taken place in Egypt, as IOC's were forced to export their share of crude oil directly to third parties rather than sell it to the Egyptian General Petroleum Corporation (EGPC) and risk further debt exposure. This has not only deprived Egyptian refineries from feed-stock but has also triggered a surge in imports from foreign suppliers.[4] The increasing demand caused by Egypt’s on-going fuel shortage has exacerbated the problem as EGPC has been redirecting oil resources, otherwise intended for export to the international market, for local consumption. The lost revenue from decreased exports in addition to the need to subsidize increasing imports has worsened EGPC’s struggles to pay foreign drilling companies.[5]

In late 2011, due to EGPC's financial difficulties in repaying its obligations to foreign oil and gas companies on time, it came to an agreement with foreign companies to continue operating while paying the overdue obligations on a timeline that extended through the end of the 2012 fiscal year at interest rates between 1.5% and 2.5%. Despite the deal, in October 2012 a number of companies requested that EGPC settle its debts in a single payment. Financial obligations to international oil and gas exploration and development companies are one of the largest consistent burdens on the state-run company. In July 2012 alone, the EGPC settled almost US$1.2 billion on payments to exploration companies.[6] Egyptian oil Minister Osama Kamal was quoted by the Egyptian newspaper Al-Mal in March 2013 saying the government recently paid US$1 billion in debt to foreign energy firms and that another US$1 billion would be paid shortly after.[7]

Concerning local banks, EGPC repaid a total of US$3.2 billion towards outstanding loans during the first quarter of the 2012 fiscal year and the last quarter of the 2011 fiscal year, bringing EGPC’s total debt to banks down from US$10.8 billion to US$7.6 billion. Nonetheless, EGPC remains the most indebted entity within the Egyptian government. In May 2012, EGPC failed to gain new loans from both the Central Bank of Egypt and NBE, with both banks citing that the EGPC had breached its credit ceiling.[8]

In late 2012, EGPC was discussing the details of a plan with the National Bank of Egypt (NBE) that would make an immediate single payment possible. NBE proposed that it buy EGPC’s debt to foreign companies allowing it to repay the debt in a timelier manor. While estimations of the debt in the media have ranged from US$4 billion[9] to US$9 billion,[10] the NBE deal set the sum to be paid to the oil and gas companies at US$4.5 billion. EGPC already owes NBE approximately US$3.6 billion of its outstanding US$7.6 billion to banks. EGPC also has loans from Morgan Stanley, BNP Paribas, and Islamic funding agreements with the International Islamic Trade Finance Corporation.[11]


  1. "More than A 100-year journey" Egypt Oil&Gas, retrieved 18 March 2013.
  2. "EIA Country Analysis" US Energy Information Administration, retrieved 18 March 2013.
  3. "Country Profile" Revenue Watch Institute, retrieved 18 March 2013.
  4. "Egypt’s Untold Diesel Story" Daily News Egypt, 23 March 2013.
  5. "EGPC Struggles to Stay Afloat" Daily News Egypt, 28 October 2012.
  6. "EGPC Struggles to Stay Afloat" Daily News Egypt, 28 October 2012.
  7. "Egypt to Import Libya Oil, Pay Down Energy Debt" Reuters, 27 March 2013.
  8. "EGPC Struggles to Stay Afloat" Daily News Egypt, 28 October 2012.
  9. "EGPC Struggles to Stay Afloat" Daily News Egypt, 28 October 2012.
  10. "Egypt Debts to Oil Firms Highlight Subsidies Struggle" Aswat Masriya, 12 April 2013.
  11. "EGPC Struggles to Stay Afloat" Daily News Egypt, 28 October 2012.