Egypt begins to reap fruits of 3-year oil investments

CAIRO - 6 April 2017: Egypt has started to reap the fruits of investments injected into its oil sector during the last three years, with the British Petroleum (BP)-operated Taurus/Libra gas fields, known as the West Nile Delta project, being connected to the national natural gas grid and starting production this week.

The BP-operated project has been connected to the national natural gas grid after production began last Monday, an official at the Egyptian Natural Gas Holding company told Youm7 Wednesday.

The West Nile Delta (WND) project involves the development of gas and condensate fields and is located within the North Alexandria and West Mediterranean Deepwater concessions in the Mediterranean Sea, approximately 65-85km off the coast of Alexandria, according to the project’s official website.

BP is the operator, holding a 60 percent stake in the North Alexandria concession and an 80 percent stake in the West Mediterranean Deepwater concession.

“The Taurus/Libra’s daily capacity is 630 million cubic feet of gas, raising the total production of Egypt’s natural gas to about five billion cubic feet,” added the official, who spoke under the condition of anonymity.

BP and RWE DEA (second partner) will develop five trillion cubic feet (tcf) of gas and 55 million barrels (mmbbl) of condensate reserves from Phase I of the WND project with an overall investment for Phase I estimated at $12 billion. The existing undeveloped fields and future exploration activities are expected to further boost the production from WND by an additional five to seven tcf.

Egypt's domestic gas production is currently about 4.4 billion cubic feet per day versus consumption of around 5.2 billion cf/d, according to a statement from the Petroleum Ministry last month.

“Egypt will boost the production of natural gas to five billion cubic feet per day in the 2017/18 fiscal year,” Oil Minister Tarek El-Molla told Reuters last October.

“Zohr Field, in the Shorouk concession area, production will begin next October with capacity of about 350 million cubic feet per day being doubled in December amounting 700 million cubic feet per day by the end of this year,” General Petroleum Corporation’s Chief Executive Officer, Eng. Abid Ezz Al-Regal said.

But despite the expected increase in production to 5 billion cubic feet of gas per day, growing consumption in the 2017/18 FY (start in July1) is also expected to swallow up the rise.

Prime Minister Sherif Ismail said in previous remarks that the new fields’ production will reduce Egypt's imports of petroleum products from abroad, which amount 1.2 billion cubic feet per day.

“In mid-2018, Egypt will import limited quantities of petroleum that could reach one or two shipments per month, while Egypt currently imports 12 consignments per month” Isamil added.