* Government says it owes $6 billion to foreign oil firms
* Egypt needs Gulf aid, renewal of confidence in economy
* Foreign reserves under pressure since Mubarak fell
By Asma Alsharif and Shadia Nasralla
CAIRO, Dec 4 (Reuters) - Egypt promised on Wednesday to pay$1.5 billion of the $6 billion it says it owes foreign oilcompanies, aiming to restore investor confidence in an economydamaged by nearly three years of political turmoil.
Officials speaking at an investment conference pitched atGulf Arab states and businessmen tried to allay concerns rangingfrom legal uncertainty to the foreign currency black market.
"There is approval to pay $1.5 billion," Prime MinisterHazem el-Beblawi told the gathering. He said the arrears haddiscouraged investment in the critical energy sector.
Gulf oil-producers rallied behind Egypt after the armyousted Islamist President Mohamed Mursi in July, pledgingbillions of dollar in financial support. Saudi Arabia and mostother Gulf states deeply distrust Mursi's Muslim Brotherhood.
The state-owned Egyptian General Petroleum Corporation(EGPC) plans bid rounds this month for 15 oil and gasexploration blocks in the Gulf of Suez and the eastern andwestern deserts, Adel Saeed, EGPC's deputy CEO for agreementstold Reuters on the sidelines of the gathering.
The state news agency reported earlier that Egypt signedagreements on Wednesday with Apache Corp, Royal DutchShell and GDF Suez for oil and gas explorationin the eastern and western deserts and the Gulf of Suez.
Finance Minister Ahmed Galal told the conference the centralbank would supply the dollars to reimburse the oil companies andOil Minister Sherif Ismail said this would happen within days.
Financial disclosures by firms including BP, BG Group, Edison SpA and TransGlobe Energy showEgypt owed them more than $5.2 billion at the end of 2012.
In the week after the army removed Mursi, Saudi Arabia,Kuwait and the United Arab Emirates promised Egypt a total of$12 billion in grants, interest-free loans and oil products.
Egypt hopes Gulf investors will also inject cash. InvestmentMinister Osama Saleh told Reuters he hoped for $4-5 billion indirect foreign investment in the year to end-June 2014.
Government officials told the conference Egypt's politicalroadmap to elections and restored stability was on track.
But there is no calm on the streets, where Mursi supporters are still protesting against what they call a military coupaccompanied by human rights abuses. The government calls theBrotherhood a terrorist group that imperils national security.
Gulf support has helped Egypt withstand Western criticism ofits democratic credentials since the army takeover, whichfollowed mass protests against Mursi's year in power.
"HOW MANY FISH?"
Asked if he anticipated more aid from Saudi Arabia, FinanceMinister Galal told Reuters: "I cannot tell beforehand. You gofishing, how many fish are you going to catch?"
Egypt badly needs private capital. Foreign direct investmentfell to $3 billion in the 2012/13 financial year, which ended inJune, compared with more than $10 billion a few years ago.
Qatar, which backed Mursi and the Muslim Brotherhood, isreluctant to invest in Egypt, but the United Arab Emirates seemskeen for its companies to launch or resume projects there.
A source close to big Abu Dhabi investment companies saidnearly $5 billion had been committed in loans and investments inEgypt in the last four months and there was scope for more.
Kirill Dmitriev, CEO of the Russian Direct Investment Fund,a $10 billion Kremlin initiative, said he was encouraged by theUAE's presence at the conference. "We believe Egypt is becomingan attractive investment destination," he told Reuters.
UAE Minister of State Sultan Al Jaber said sectors underdiscussion included agriculture, oil, gas and renewable energy,but called for the right legal framework to reassure investors.
The government is preparing a law to reinforce the legalstanding of past contracts with the state, Mohamed Abazeid, anadviser to Egypt's investment minister, told the conference.
Egypt's business climate has been clouded by court casesthat have challenged past state contracts, including rulingsordering the re-nationalising of state businesses sold whenousted autocrat Hosni Mubarak was in power.
The army-installed government, under pressure to produce a long-term plan to revive the economy, launched a 29.6 billionEgyptian pound ($4.3 billion) stimulus package this year afterMursi's overthrow brought aid pledges from Gulf countries.
The economy grew a meagre 2.2 percent in the year to June30, far too slow to make an impact on youth unemploymentestimated at over 20 percent. Beblawi said the government aimedfor economic growth of 3.5 percent in the current fiscal year.
Egyptian tycoon Naguib Sawiris, whose family controls theOrascom corporate empire, told Reuters he would invest $1billion in Egypt in the first quarter of 2014, mostly inconstruction, real estate, agriculture and microfinance.
But it will take more than one heavy hitter to fix Egypt'sfinances.
The Egyptian pound is being propped up by centralbank dollar sales, introduced a year ago to help counter a runon the currency as the plunge in foreign investment and tourismcaused a sharp fall in foreign reserves.
Reserves, which stood at $36 billion before Mubarak fell,have been under pressure ever since. They totalled $18.59billion at the end of October and Central Bank governor HishamRamez told the conference they had dipped slightly last month.
He said the black market for the pound would "not lastlong". Two market sources said on Wednesday the currency hadweakened against the dollar because of importer demand.
BP (BP.)
