Hi Egypt says to repay debts to foreign oil companies within six months.

Hi Egypt says to repay debts to foreign oil companies within six months.

By Ehab Farouk and Lin Noueihed:

CAIRO (Reuters) - Egypt plans to repay all of its $4.9 billion debt to foreign oil and gas companies within six months, the oil ministry said on Thursday, a move it hopes will prompt them to boost exploration and ease the worst energy crunch in decades.

Egypt has delayed payments to oil and gas firms as its economy has been hammered by almost three years of instability since a popular uprising ousted autocrat Hosni Mubarak.

Arrears began to accumulate before the revolt, but worsening state finances saw the debts mount to billions of dollars while the government diverted gas earmarked for export to meet domestic demand.

Gas production has steadily declined in Egypt while consumption keeps rising, but firms have been reluctant to increase investment in exploration and production, particularly in costly offshore areas, until the government repays them.

The ministry said in a statement that Egypt planned to borrow $2 billion to help it finance the repayments, seeking to repay 60 percent of the arrears by year-end.

"This offering comes as one of the short-term measures taken by the government to pay the (international oil companies') arrears," Oil Minister Sherif Ismail said in the statement.

He said state oil and gas boards EGPC and EGAS were holding further talks with the companies, in parallel with repayments, to "manage their expectations".

Egypt said in October it had repaid $1.5 billion of the money owed, leaving $4.9 billion outstanding.

But Dana Gas <DANA.AD> said on Wednesday it understood that about half that amount had been repaid, with $700 million more due by year-end.

It expects to get some of that cash and also plans to invest more than $350 million in Egypt over the next few years to drill new wells and redevelop existing wells.

BG Group's <BG.L> earnings have been hit hard by the turmoil as its production and exports of liquefied natural gas from Egypt have been disrupted.

"The Egyptians have paid a big tranche in September and have promised to repay more within a few months, but they have made similar promises in the past and we will have to wait till we see the money," a senior source at BG said.

The gas shortage has left the Arab world's most populous country struggling with blackouts that became almost daily over the summer. The government has also diverted gas away from heavy industries, hitting companies' performance.

Egypt began cutting subsidies on fuel and electricity in July as part of economic reforms aimed at curtailing its budget deficit and curbing growth in energy consumption.

(Additional reporting by Ron Bousso and Karolin Schaps in London and Matt Smith in Dubai; Editing by David Goodman and Susan Fenton).

Hi Egyptian rights groups fear government crackdown looms.

Hi Egyptian rights groups fear government crackdown looms. 

* 2002 law tightly restricts activities, finances of NGOs.

* Rights groups say climate not safe for their work.

* Sisi has presided over broad crackdown on dissent.

By Maggie Fick

CAIRO, Nov 9 (Reuters) - Some Egyptian human rights groups shredded documents on Sunday and instructed their staff to stay home as a government deadline approached for them to register under a Hosni Mubarak-era law they say seeks to eliminate them.

Egypt's government says groups doing the work of non-governmental organisations (NGOs) but not registered as such must correct their status by Monday to comply with a 2002 law it is enforcing while it works on new legislation for the sector.

Human rights groups say the push to enforce the old law aims to restrict their activities and funding, raising concerns that President Abdel Fattah al-Sisi's government is rolling back freedoms won in the 2011 uprising that ousted Mubarak.

"Whatever happens, I don't think that the human rights movement in Egypt is going to be able to work safely," Mohamed Zaree, programme director at the Cairo Institute for Human Rights Studies (CIHRS), told Reuters.

He said his group had never tried to register under the 2002 law and refused to do so now because it was "a death sentence for our independence".

Contacted by Reuters on Sunday, neither the Social Solidarity Ministry, which is responsible for NGOs, nor the presidential spokesman were immediately available for comment.

But Social Solidarity Minister Ghada Wali told Reuters last month that the state could not let groups operate unregulated pending a new NGOs law that could take months.

She sought to assuage fears that her ministry would use the 2002 law to starve critical NGOs of funding, saying that from June 30, 2013 to Sept. 30, 2014, it had approved 812 grants to 500 NGOs from 540 donors totalling 835 million Egyptian pounds.

But she also said the government would begin going after improperly registered organisations once the deadline passed.

The government's deadline comes as executives from more than 60 U.S. businesses visit Cairo for a major investment summit.

Foreign investors have looked positively on initial economic reforms enacted by Sisi, who has pledged to revive the economy and combat an Islamist insurgency. He has been less specific on upholding the rights many Egyptians rose up to demand in 2011.

Since toppling elected President Mohamed Mursi of the Muslim Brotherhood last year, Sisi has presided over a fierce crackdown on dissent that has seen many thousands jailed.

Though most targeted in the crackdown were Mursi supporters, liberal and secular activists are now also behind bars -- many of them charged with violating a new law that limits protest.

The political climate means trust is low between the government and civil society in Egypt. Some groups have felt particularly exposed since late 2011, when authorities raided 17 local and international pro-democracy and rights groups accusing them of joining a foreign conspiracy against Egypt.

Some groups have refused to register under the 2002 law because it enables tight state control over the activities and finances of registered groups. Others are registered as civil companies or law firms because the government never approved their applications under the 2002 law.

"CLIMATE OF FEAR"

Rights defenders interviewed on Sunday said they were taking precautions such as temporarily closing their offices or working from home. Speaking on condition of anonymity, two groups said they had destroyed documents in anticipation of a raid.

Amnesty International's Egypt researcher Nicholas Piachaud told Reuters that, regardless of what happened on Monday's deadline, the damage had "already been done".

"The Egyptian authorities are sowing a climate of fear which has stopped NGOs from doing their vital work of defending human rights and the law," he said.

Zaree of CIHRS said his group and others already operated under severe constraints, constantly worried their work would be seen by the state as an attempt to "stain the national image".

He cited his group's decision not to participate in last week's United Nations Human Rights Council review of Egypt's human rights record as an example when the group had to stand down, not knowing "what the cost of participating would be."

Egypt defended its record at the meeting, saying that personal freedoms were among its prime concerns.

The Egyptian Initiative for Personal Rights (PIER), a well-known group, said it tried in 2004 to register under the law but "nothing happened", even after staff went to court to try to get the application accepted. Like other groups doing similar work, EIPR is registered as a limited liability company.

"We really don't see the point of registering under a 12 year-old-law that even the state says is inadequate," said EIPR Associate Director Gasser Abdel-Razek. "Everyone accepts the fact that this is not a democratic law". (Additional reporting by Stephen Kalin, Lin Noueihed and Shadi Bushra, Editing by Lin Noueihed and Tom Heneghan).