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Published: Wednesday April 23, 2014 MYT 6:50:52 AM
Updated: Wednesday April 23, 2014 MYT 6:52:38 AM

Egypt to pay some $1 billion owed oil firms within two months - minister

Egypt's Oil Minister Sherif Ismail talks during an interview with the media in Cairo November 10, 2013. Picture taken November 10, 2013. REUTERS/Stringer

Egypt's Oil Minister Sherif Ismail talks during an interview with the media in Cairo November 10, 2013. Picture taken November 10, 2013. REUTERS/Stringer

CAIRO (Reuters) - Egypt will pay about $1 billion (594.2 million pounds) of the money it owes to foreign oil companies within the next two months, the state's MENA news agency said, quoting Oil Minister Sherif Ismail.

Egypt says it owes some $6.3 billion to those companies.

It last year said it paid $1 billion of the money it owes the international firms as part of a repayment scheme seeking to revive confidence in the economy after years of turmoil.

"A new chunk of around $1 billion will be paid to foreign firms within two months," Ismail said on Tuesday.

The country has previously said it would repay a further $3 billion in monthly instalments until 2017 as an incentive to encourage foreign oil companies to increase exploration and production.

Egypt has been struggling to meet soaring energy bills caused by high subsidies on fuel products for its 85 million people, most of whom are poor and uneducated.

The government's ability to pay oil companies and contractors was hit after the popular uprising that ousted president Hosni Mubarak in February 2011 which roiled investment and tourism and cut tax revenues.

Financial disclosures by firms including BP, BG Group, Edison SpA and TransGlobe Energy show Egypt owed them more than $5.2 billion at the end of 2012.

Political turmoil has intensified after the army overthrew elected Islamist president Mohamed Mursi last year following widespread protests against him.

Since Mursi's ouster, Saudi Arabia, Kuwait and the United Arab Emirates have poured in billions of dollars in grants, interest-free loans and oil products.

Ismail said Egypt receives around $700 million in petroleum aid every month from Arab states.

(Reporting by Ehab Farouk, Mostafa Hashem and Yasmine Saleh; Writing by Yasmine Saleh; Editing by Eric Walsh)

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