BP Plans $240m Investment in Egypt

BP Plans $240m Investment in EgyptBP Plans $240m Investment in Egypt

BP Egypt has announced today that it has been awarded two new exploration blocks as a result of the 2013 EGAS bid round. BP and its partners have committed to invest a total of $240 million in the blocks over different phases, Mubasher reported.

Block 3 – North El Mataria is BP’s first entry into the Onshore Nile Delta. The block is located in the northeastern part of the Nile Delta cone, approximately 57km to the west of Port Said city. BP will operate the block with 50% equity and Dana Gas will hold the remaining 50% working interest.

Block 8 - Karawan Offshore is located in the Mediterranean Sea, in the northeastern part of Egypt’s economic waters. The block lies at approximately 220km to the NE and 170km to the NW of Alexandria and Port Said cities respectively. BP will have 50% equity and the block will be operated by ENI which holds the remaining 50%, according to the company’s release.

The program will include 3D seismic and three exploration wells in each of the onshore and offshore blocks in phases over 6-8 years.

Hesham Mekawi, BP North Africa Regional President, commented, “BP is proud of the successful partnership it has had with Egypt for 50 years.

We look forward to continuing to play a key role in the development of Egypt’s energy sector and maximizing the use of our existing resources. Our expertise and latest technologies will be deployed for mutual benefit in these new blocks which we believe have gas-bearing characteristics.

Exploring the two blocks will require substantial investments to unlock their potential, and will be done as part of our commitment to meeting Egypt’s energy needs.”

Egypt is currently in a state of fiscal lassitude. For three years now, fiscal deficit and public debt have been soaring, approaching, respectively, 14 percent and over 100 percent of gross domestic product (GDP). Continued domestic borrowing to finance the growing deficit has increasingly exposed the banking sector to government debt, crowded out private investment, and resulted in sluggish economic growth that—at an average of 2 percent a year—was barely above the population growth of 1.7 percent.