Egypt’s efforts to reduce its debt to the UK’s BG Group have failed to revive the company’s interest in its stalling $1.5bn West Delta Deep Marine (WDDM) gas field development.

“We haven’t taken the investment decision to develop phase 9b,” said a spokesman for BG Group, speaking after a $350m payment was made to the company on 2 October.

“We are talking to the government about the conditions under which we would commit further funds [to the WDDM project].”

Egypt distributed $1.5bn in owed money to international oil companies (IOCs) last week in an effort to win back the trust of the foreign firms.

BG Group has delayed making an investment decision on the next stage of WDDM after years of late payments from Egyptian General Petroleum Corporation (EGPC), and seeing gas diverted away from its liquefied natural gas (LNG) export facilities to meet local demand.

At the end of the second quarter, Cairo owed BG Group $1.5bn. The latest payment has reduced that figure to about $1.2bn, according to the company.

“Fundamentally, the reservoir is in decline itself,” said the spokesperson. “The second problem is gas being diverted away from our facilities. The gas that is produced comes ashore and 50 per cent of that was supposed to go to our LNG export facility at Idku. What has actually been happening is that the vast majority has been going straight into the domestic market, so much so that there has only been a couple of cargos out of the LNG facility this year, and we see very limited potential for further cargos.”

Currently, BG Group is executing a nine-well programme called phase 9a. It was due to be followed by a second nine-well programme called phase 9b, but no investment decision has been made and its future is looking increasingly uncertain.

BG Group says it is considering other investments that include importing gas from Israel to supply its Idku LNG export facility.

Egypt is currently in the grip of its worst energy crisis in decades. A shortage of natural gas has led to frequent electricity blackouts across the country.

The energy crunch comes after years of underinvestment by IOCs, something that has led to a fall in production over the past three years.

Many analysts see fast-tracking projects such as WDDM and UK-based BP’s $10bn scheme to develop its North Alexandria concession as key to easing the country’s energy crisis.

Like WDDM, BP’s $10bn development project is stalling and negotiations to try and see the scheme restarted are seeing little progress.