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BP p.l.c. (BP) - $25 value - yours FREE >>
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BP to Redirect Focus From Oil Assets in Egypt to Gas Reserves
BP plc (BP - Free Report) recently announced its decision to divest Gulf of Suez oil concessions in Egypt to an upstream energy firm Dragon Oil. The value of the transaction has not been disclosed yet.
With the divestment, the British energy giant is planning to focus on gas reserves located off the coast of Egypt. The company has already produced first gas from the West Nile Delta development’s second stage. The project entails the production of natural gas from the Giza and Fayoum fields and the integrated energy firm expects peak production of 700 million cubic feet of gas per day.
BP commenced the first stage of the West Nile Delta project in 2017 and is expecting to start gas production from the final stage by the second half of 2019. Notably, in the first stage, BP developed the Taurus and Libra fields, while the final stage involves the development of the Raven field.
Overall, the West Nile Delta is a major upstream project and the company is expecting the full development — comprising the first, second and final stages — to produce roughly 20% of the current natural gas production volumes in Egypt. BP added that the national gas grid will utilize the entire gas being produced from the West Nile Delta.
Investors should know that in the past four years, the company invested roughly $12 billion in Egypt. Since BP considers the country a core region for conducting upstream operations, the company is preparing to allocate additional $3 billion over the next two years.
Importantly, BP is the not the only major firm focusing on Egypt for natural gas. Other energy majors that were awarded gas exploration concessions in Egypt are Royal Dutch Shell plc , Exxon Mobil Corporation (XOM - Free Report) and Eni S.p.A. (E - Free Report) .
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