British Petroleum’s CEO Bob Dudley said on Friday the company plans to invest $12 billion together with its partner DEA in Egyptian gas fields. They intend to develop five trillion cubic feet of gas resources and 55 million barrens of condensates (low-density raw natural gas), starting as early as 2017.
DEA, formerly the oil and gas unit of the German power giant RWE, was sold to the Luxembourg-based investment fund LetterOne last week. LetterOne is controlled by Alfa Group which belongs to billionaire entrepreneur Mikhail Fridman.
BP holds a 65-percent stake in the project, to Fridman’s 35 percent.
BP said this was a “vote of confidence” in Egypt.
This will be a shot in the arm of the new ruler of Egypt, President Abdel Fattah el-Sisi, under whose government the country has run out of its energy reserves, and has contemplated turning to Israel for natural gas.
According to BP, the project construction will employ thousands of Egyptian laborers.
“The WND (West Nile Delta) project investment is the largest foreign direct investment in Egypt, ” Dudley said in a statement, after the final agreements had been signed.
Dudley noted that “WND production is key to Egypt’s energy security.”
The WND gas will be used for the domestic market, doubling BP’s supply.
BP North Africa’s regional president Hesham Mekawi, who has an MBA from Boston University and worked as analyst for Amoco and other major companies in Houston and Chicago, said the agreements marked “a critical milestone in the Egyptian oil and gas history”.
The gas will be produced by two BP offshore blocks: North Alexandria and West Mediterranean Deepwater. The partners consider additional, future exploration.