UK firm says previous terms were not commercially viable
UK oil major, BP has signed a new deal with the Egyptian Petroleum Ministry and state-run Egyptian General Petroleum Corporation (EGPC) to develop two offshore gas concessions, according to a 19 July company statement.
According to BP, 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, Hamburg-based RWE Dea to proceed with development. Previous terms for the oil major were not commercially viable.
BP expects natural gas production at the $9bn West Nile Delta development, which covers the North Alexandria and West Mediterranean Deepwater concessions, to reach up to 1 billion cubic feet a day (cf/d).
The first phase will develop an estimated 5 trillion cubic feet of gas along with condensates through five offshore fields. This will be fed to a new onshore gas plant on Egypt’s Mediterranean coast. The company expects its first gas in late 2014.
BP is the operator of the North Alexandria concession and holds a 60 per cent stake. RWE Dea holds the remaining 40 per cent. The companies also partner on the West Mediterranean Deepwater concession where BP is the operator, holding an 80 per cent share and RWE Dea 20 per cent.
In its 2010 Review of World Energy, BP estimates Egypt to have 77.3 trillion cubic feet of proven natural gas reserves. The country produced 62.7 billion cubic metres in 2009.
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