Egypt signs new petroleum agreement with BP to explore oil, gas

CAIRO – 30 July 2018: Egyptian General Petroleum Corporation signed a new petroleum agreement with the British Company BP to explore and produce oil and gas in the northeast of Ramadan in the Gulf of Suez with investments of about $46 million and a $4 million grant to drill three wells.

The agreement was signed by Chief Executive Officer of the Petroleum Authority Abed Ezz al-Ghanim, and Regional President of British Petroleum (BP) North Africa Hisham Makkawi.

Minister of Petroleum Tarek el-Molla said that his ministry has an ambitious plan to increase petroleum investments in the fields of exploration and development of discovered fields, and increasing local production of oil and gas.

The minister noted that new petroleum agreements provide investments that are essential to increase production.

Regarding the agreement with BP, Molla said that it is one of the fruits of the global bidding for oil exploration and exploitation proposed by the Petroleum Authority in 2016.

“The Suez Gulf region continues to enjoy promising investment prospects in light of the continuous development of the petroleum industry's research, studies and use of modern technologies in all sectors,” Molla clarified.

The number of signed petroleum agreements reached 88 new agreements since 2014 and the authority is working on signing 13 new agreements.

BP has been working in Egypt for 50 years, focusing on exploration and production. It currently produces almost 15 percent of Egypt’s entire oil production and close to 30 percent of Egypt’s gas production with its partners.

The British company discovered Atoll field, in the North Damietta concession of the East Nile Delta, in 2015. The field has gas reserves of 1.5 trillion cubic feet of gas and 31 million barrels of condensates.

BP also holds 10 percent stake of the Shorouk concession.

Earlier this month, the Petroleum Ministry signed three agreements for oil and natural gas exploration and production in North Sinai and the Gulf of Suez.

The first agreement was signed with South Valley Egyptian Petroleum Holding Company (Ganope) and Britain's GHP Corporation to dig six new wells in the western Gebel El-Zeit Concession with total investments of $6 million.

Gebel El-Zeit is an isolated, elongate mountain that reaches up to 457 meters and overlooks the southern end of the Gulf of Suez.

The second agreement was inked with the Egyptian General Petroleum Corporation (EGPC) to search for oil in Ras Fanar Concession in the Gulf of Suez while the third one was signed with EGPC and Britain's Perenco Oil and Gas Company for exploring in North Sinai maritime concession.

Egypt’s production of natural gas increased in December 2017 to reach 3.4 million tons, up from 2.7 million tons in December 2016.

Egypt’s gas production currently stands at 5.5 billion cubic feet a day, after adding some 1.6 million cubic feet as a result of starting production from the aforementioned projects.

The country's total natural gas consumption is about 6 billion cubic feet per day, of which roughly 65 percent goes to the electricity sector.