Dana Gas upbeat on payments
Cairo, October 25, 2012
Egypt is paying Dana Gas for all fuel it is receiving from its operations in the north African country and the UAE-based company is optimistic outstanding payments will be settled, a Dana Gas board member said yesterday.
Economic turmoil has stretched Egypt's finances and it fell behind in its payments to several fuel suppliers. Dana Gas was still owed Dh729 million ($198.5 million) for unpaid fuel bills by Egypt as at June 30, but Cairo has been keeping up payments for current supplies.
"They are basically paying their current receivables, it's the backlog that needs to be closed out. But we are optimistic that this is a short-term issue," said Majid Jafar, a Dana Gas board member and chief executive of Crescent Petroleum, Dana's biggest shareholder.
"It's an ongoing discussion with regular interaction. We feel that they are doing all they can - they are even going the extra mile and we had some payments even from oil cargoes that they sold," he said in an interview.
"They have been very transparent and proactive in trying to address the receivables issue. The financial situation of the government is well known - the challenges that they are facing fiscally - but we are committed to Egypt long term."
Rather than being put off by payment problems that followed the overthrow of Hosni Mubarak after three decades in power, Dana is looking to grow in a country that has large reserves and booming internal demand for them.
"We have enjoyed a very good relationship and I would say an even stronger relationship as a UAE company since the revolution with the new government," Jafar said.
"We are interested in the new bidding rounds potential that the Egyptian government has announced and we think it's a very promising market," he added.-Reuters