Dana Gas Says Egypt Can Pay Back Dollar Debt in Local Currency
Dana Gas PJSC offered to allow Egypt to pay back part of the $290 million owed to the company in local currency to make it easier for the state to find the money, needed by the producer to sustain output.
Dana is waiting for a reply to its proposal that the nation pay 65 percent of the dollar debt in Egyptian pounds, Chief Executive Officer Patrick Allman-Ward told reporters in Sharjah. The temporary measure would let Egypt retain foreign-exchange reserves and give Dana currency to pay local costs, he said.
Egypt, the Arab world’s most populous nation, is struggling to meet fuel demand as local output slowed after an uprising in 2011 and a military coup this year. Dana Gas (DANA) restructured about $1 billion of its Islamic bonds in December because of payment delays caused by political unrest in Egypt and Iraq.
The company, based in the United Arab Emirates, increased output about 6 percent this year from 2012’s 60,000 barrels of oil equivalent a day, Investor Relations Director Robinder Singh said. Egyptian output reached a two-year high of 41,500 barrels in August, while the Kurdistan region of northern Iraq was flat.
Dana is talking with the Kurdish government to recover $430 million of receivables, said Allman-Ward, who replaced Ahmed Al-Arbeed as CEO this month. Dana expects to start up the Zora gas field off the shores of U.A.E.’s Sharjah and Ajman emirates in late 2014 with a daily output of 40 million cubic feet, he said.
“The intent is that we would get more gas and in return for that gas we would be then paid, say, at a higher price,” Allman-Ward said of the plans to recover receivables. Dana has the potential to raise Egyptian output 25 percent, he added.
Proposals to list shares abroad aren’t high on the agenda, Singh said. The National newspaper in May cited board member Majid Jafar as saying the company may revive the plans.
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