Dana Gas chief executive said on Saturday it will invest $350mn in Egypt over the next two and a half years, Reuters has reported.
As part of the investment, the UAE exploration and production firm is set to drill nearly 40 new development wells, a similar number of workovers on existing wells, build new pipelines and devottleneck an existing plant, Patrick Allman-Ward told Reuters at a weekend investment summit at the Red Sea resort of Sharm El-Sheikh.
He said that he expected Egypt to repay $185mn of its debt to Dana by the end of 2016. If they failed to do so, the company would recover the money by the end of 2018 by selling the government’s share of condensate exports under a production agreement, Allman-Ward added.
“The mechanism will allow us to recover the current overdue receivables over the course of time”, he said.
Egypt’s oil ministry said last week it would repay its remaining $3.1bn debt to foreign oil and gas companies by mid-2016, a year later than previously promised.
Recently, the North African country has attracted major interest in foreign investors, with BP signing a $12bn gas deal with the government last week.Â
Allman-Ward said the government last year paid $60mn in arrears to Dana, which relies on Egypt for over half of its output.
The chief executive also called for reforms to reduce inefficiency in the country’s energy sector where oil and gas discoveries require the establishment of new joint ventures with redundant capacity.
“I’m sure there’s some consolidation that could be carried out to make this process more efficient. It’s not the way it’s done in other countries, in other petroleum environments,” he said.
He also said having the state-owned oil and gas companies as joint venture partners and regulators was inefficient.
“This blurring of the lines between regulatory responsibilities and partnership is intrinsically a conflict of interest and it does lead to misalignments of interest”, he said.
At the investment summit over the weekend, Saudi Arabia, the UAE and Kuwait pledged an additional $12bn in central bank deposits and investments to EgypT to strengthen the economy.
“If you are flying the UAE flag and doing business in Egypt one hopes a component of the goodwill… is helpful in terms of building relationships and concluding negotiations and making business investments,” said Allman-Ward.
