CAIRO, Dec 11 (Reuters) - Egypt is still in talks withforeign energy companies to change the amount the governmentpays them for natural gas produced in the country and there isno timeline for when negotiations will finish, an oil ministryspokesman said.
Officials have said they hope revised prices will encourageinvestment and future production in Egypt, notably offshorewhere costs are high, to avoid shortages on the domestic market.
Oil Minister Sherif Ismail was quoted as saying, about threeweeks ago, that state-run Egyptian Natural Gas Holding Company(EGAS) would sign seven new contracts and modify seven otherswithin two weeks.
Ministry spokesman Hamdy Mohamed Abdel Aziz said onWednesday that talks with foreign companies are being conductedby EGAS and by Egyptian General Petroleum Corporation (EGPC),which is also a state-run firm.
Egypt pays offshore gas producers on average around $2-$3per million British thermal units, according to industryestimates. Comparable payments for gas in Britain are currentlyabove $10 and for Asian supply above $17.
Exploration companies are hesitating to develop untapped gasfinds in Egyptian waters partly because the amount thegovernment pays them barely covers their investment costs.
The government has also been late with payments to foreignoil companies, but last week the oil minister promised to payback $1.5 billion of the $6 billion owed.
This has caused domestic gas shortages, another potentialspark for unrest in the Arab world's most populous nation, whichhas experienced near constant upheaval since the 2011 uprisingthat toppled autocrat president Hosni Mubarak.
Abdel Aziz said there was no set timeline for when the talkswould conclude and that new prices would depend on the specificsof each contract.
Egyptian officials have suggested pricing arrangementsshould be changed to reflect the high costs of offshoreexploration in deep water, arguing that such reform would spurnew investments.
Abdel Aziz did not specifiy which firms were involved in thetalks. He could not immediately be reached for further comment.
Foreign firms involved in exploiting gas in Egypt includeBritish majors BP and BG Group and Italy's Eni.
Egypt's Oil Minister Sherif Ismail told business executiveson Tuesday that the government was in talks about changing gaspricing arrangements, without elaborating.