BP announced Monday that it has signed a new agreement with the Egyptian Ministry of Petroleum and the Egyptian General Petroleum Corporation (EGPC) to develop the significant hydrocarbon resources in the North Alexandria and West Mediterranean Deepwater concessions.
Production from the West Nile Delta development is projected to reach up to 1bn cubic feet per day, providing a major new source of gas for the domestic market in Egypt, the company said.
BP which has been in Egypt for almost 50 years operates and holds 60% of the North Alexandria concession with RWE Dea holding the remaining 40%. It also has an 80/20 majority stake of the West Mediterranean Deepwater concession with RWE Dea.
The North Alexandria and West Mediterranean Deepwater concessions are located in the Mediterranean, offshore of the city of Alexandria.
BP Egypt has made a number of discoveries in these concessions including the Giza, Taurus, Libra, Fayoum and Ruby in the Pliocene, and the Raven discovery in the deeper Miocene formations.
The first phase will develop an estimated 5tn cubic feet of gas and associated condensate through subsea development of five offshore fields into a new purpose-built onshore gas plant on Egypt’s Mediterranean coast. First gas is expected in late 2014.
The new agreement amends the commercial terms and the governance structure for the two concessions located in the West Nile Delta, enabling BP and its partner RWE Dea to proceed with development.
”This agreement unlocks a new phase in realising the huge potential of the Nile Delta basin, which will play an important role in meeting regional energy security needs in the coming decades,” said BP chief executive Tony Hayward. ”BP and EGPC have a long-standing and successful partnership, and the agreement we signed today takes that to a new level in developing these deepwater resources, as well as creating an important source of future growth for BP.”
Hesham Mekawi, President of BP Egypt, commented: ”This is a very important project that is set to unlock a strategic gas resource in the West Nile Delta area, which is significant for Egypt’s energy supply today and the future. The investment in this project, estimated to be US$9 billion gross, will reinforce Egypt’s importance as a major source of future oil and gas production.”
BP believes that the scale of investment and activities of the West Nile Delta Project is expected to create thousands of job opportunities during the different project phases and will significantly contribute to the growth of petroleum-related industries in Egypt.
To date, BP Egypt has invested more than $17 billion in the country, making BP the single largest foreign investor in the country.
