Egypt Plans to Pay Foreign Oil Firms Partially in Pounds..
By Ola Galal - Feb 19, 2013 3:26 AM ET
Egypt plans to repay a quarter of its about $9 billion debt to foreign oil companies in Egyptian pounds, the independent El-Watan newspaper reported, citing Industry and Foreign Trade Minister Hatem Saleh.
The remainder would be paid in installments over the coming period, it quoted him as saying without providing further details. Bloomberg..Comments?..
So, what's the bottom line?
How does "planned" payment in Egyptian pounds affect earnings at TGA? Can they use the pounds to pay workers, etc.?
It seems that if Egypt screws oil exploration companies, they will be killing their golden goose - that is, a major revenue source.
Paying the oil companies in Egyptian pounds at the current equivalent exchange rate stipulated by the contracts allows Egypt to spare its foreign exchange reserves. The oil companies are free to exchange the Egyptian pounds into other currencies at a small additional cost. JMO