Abu Dhabi: Sharjah-based regional private sector natural gas company, Dana Gas, has said it is owed $270 million (Dh990.9 million) by the Egyptian government in back payments for the gas it produced.

“The company is conducting positive discussions with the relevant authorities and looks forward to an early resolution,” the company said last week in a statement.

The statement from Dana Gas comes at a time when Egypt, according to a Reuters report, owes at least $5 billion (Dh18.3 billion) to oil companies producing oil and gas on its territory, with half of it overdue. The report said the Egyptian government, seeking to avoid public unrest, has delayed oil payments as it struggles to meet soaring energy bills caused by high subsidies on fuel products. Some of the debts were accumulated even before President Hosni Mubarak was ousted.

Highest

Dana Gas, meanwhile, also said it has achieved gas production level in Egypt of 200 million standard cubic feet per day, which is the equivalent of 41,500 barrels of oil equivalent per day (boepd), the highest level for the company in the African country in two years.

The company said several of its projects in Egypt are ready to be executed in order to further raise the production to a level around 50,000 boepd in the near future.

“These projects include multi-wells appraisal drilling programmes, adding gas compression facilities for the Al Basant field and a new pipeline connecting Salma and Tulip discoveries to the Al Wastani Plant. Investments in these important projects can be expedited following the successful resolution of the issue pertaining to long-pending receivables.”

Leverage

Commenting on the development, Tamsin Carlisle, a Dubai-based energy expert with global energy information provider, Platts told Gulf News: “Dana Gas is using the higher production figures as a leverage with the Egyptian government to recover the money they are owed. Their future capital spending in Egypt depends upon making progress in recovering their overdue payments from the government for the gas they have already produced.”

The stock of Dana Gas on Sunday ended 3.51 per cent higher at Dh0.59.