British Petroleum (BP) announced Friday it has signed the final agreements of the West Nile Delta (WND) Project.
The Project will see the development of 5tn cubic feet of gas resources and 55m barrels of condensates with an estimated investment of around $12bn by BP and its partner.
The project underlines BP’s commitment to the Egyptian market and is a vote of confidence in Egypt’s investment climate and economic potential, the company said in a statement.
WND production is expected to reach up to 1.2bn cubic feet a day, equivalent to approximately 25% of Egypt’s current gas production and significantly contribute to increasing Egypt’s energy supply. All the produced gas will be fed into the country’s national gas grid, helping to meet the anticipated growth in local demand for energy. Production is expected to start in 2017.
“BP is proud of its record in Egypt over the past 50 years, and we are looking forward to many more years in the country,” said Bob Dudley, BP Group Chief Executive. “The WND project investment is the largest foreign direct investment in Egypt, and demonstrates our continued confidence in Egypt and our commitment to unlock its energy potential. WND production is key to Egypt’s energy security.”
Gas will be produced from two BP-operated offshore concession blocks, North Alexandria and West Mediterranean Deepwater. The company believes there is the potential through future exploration to add a further 5-7tn cubic feet, which could boost WND production with additional investments.
Hesham Mekawi, BP North Africa Regional President said: “This is a critical milestone in the Egyptian oil and gas history. It marks the start of a major national project to add significant production to the domestic market. BP expects to double its current gas supply to the Egyptian domestic market during this decade when the WND project reaches its peak production. BP will also continue to invest in our existing oil operations at the Gulf of Suez (through GUPCO) and gas operations in the East Nile Delta (through Pharonic Petroleum Co.), as well as progressing our recently discovered resources to allow for the next new major development after WND.”
The scale of investment and activities of the WND project are expected to significantly contribute to the growth of petroleum-related industries and to Egyptian employment. During the construction phase, the project is projected to employ thousands of direct and indirect personnel. In line with BP’s commitment to support Egypt’s development, the WND project will encourage technology transfer and know-how through training and on-the-job development. This will help to create strategic national capabilities to unlock the country’s future hydrocarbon potential.
As part of the WND project, BP will also undertake a social investment programme directed to various sustainable development projects in coordination with the local communities and utilising local service providers. This will be in addition to the project’s principal approach, which is focused on increasing local labour, with a commitment to employ significant local labour during operations.