Egypt pays $1.4 billion to foreign oil and gas companies

After securing loans from national banks, the Egyptian Petroleum Ministry announced it paid off $1.5 billion of its debt owed to foreign oil and gas companies.

"The government aims to reduce the debt to encourage firms to step up research and exploration operations, to boost local production of oil and gas and minimize imports, which in turn will spare the cash to continue paying Egypt's due debts to its foreign partners," Petroleum Minister Sherif Ismail in a Thursday statement.

The ministry's announcement came the same week as it signed an agreement with a consortium of banks led by the National Bank of Egypt for $1.4 billion. The ministry said it still owes $4.9 billion to foreign firms.

Egypt is the largest oil producer in Africa that's not a member of the Organization of Petroleum Exporting Countries and the largest gas producer. It's also the largest oil and gas consumer in the region, leaving it struggling to support a vibrant energy sector that satisfies domestic demand.

The Egyptian government has boasted that British energy company BP was committed to major investments in the country, through rival BG Group has expressed reservations given continued diversions of natural gas to the domestic market.