BP (BP.L) has signed a preliminary agreement with the Egyptian Natural Gas Holding Company (EGAS) to drill five deepwater gas wells in the Mediterranean Sea, Egypt’s Petroleum Ministry said on Monday.
The memorandum of understanding with the state-owned company comes as Egypt to increase exploration and production.
Once a regional exporter, the country has become more dependent on imports to meet rising domestic demand as output falls from aging fields and investment in new projects lags.
Gas production in May was 3,545 million cubic metres, more than 40% lower than in March 2021, according to the Joint Organisations Data Initiative, which tracks global energy market data, Reuters reported.
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Drilling of the five wells, at depths ranging from 300 to 1,500 metres, is expected to begin next year, the ministry said.
Any new production would supply existing facilities in the West Nile Delta, BP confirmed in a statement.
The company, which has been operating in Egypt for more than six decades, is currently reviewing allocation of its $13–$15 billion annual investment budget as it advances new projects in Azerbaijan, Iraq, Libya, and Abu Dhabi, and pursues exploration opportunities in Namibia and Brazil, the latter described as its largest discovery in 25 years.
On August 30, Egypt’s Petroleum Ministry announced four agreements with international firms worth over $340 million to explore for oil and gas in the Mediterranean and Nile Delta.
The companies included Shell (SHEL.L), Italy’s Eni (ENI.MI), and Arcius Energy, a joint venture 51% owned by BP and 49% by ADNOC’s investment arm XRG.
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Image Credit: Reuters
