• 35 mins Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 5 hours Russia, Saudis Team Up To Boost Fracking Tech
  • 11 hours Conflicting News Spurs Doubt On Aramco IPO
  • 12 hours Exxon Starts Production At New Refinery In Texas
  • 13 hours Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 1 day Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 1 day Oil Gains Spur Growth In Canada’s Oil Cities
  • 1 day China To Take 5% Of Rosneft’s Output In New Deal
  • 1 day UAE Oil Giant Seeks Partnership For Possible IPO
  • 1 day Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 1 day VW Fails To Secure Critical Commodity For EVs
  • 1 day Enbridge Pipeline Expansion Finally Approved
  • 2 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 2 days OPEC Oil Deal Compliance Falls To 86%
  • 2 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 2 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 2 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 2 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 3 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 3 days Aramco Says No Plans To Shelve IPO
  • 5 days Trump Passes Iran Nuclear Deal Back to Congress
  • 5 days Texas Shutters More Coal-Fired Plants
  • 5 days Oil Trading Firm Expects Unprecedented U.S. Crude Exports
  • 5 days UK’s FCA Met With Aramco Prior To Proposing Listing Rule Change
  • 6 days Chevron Quits Australian Deepwater Oil Exploration
  • 6 days Europe Braces For End Of Iran Nuclear Deal
  • 6 days Renewable Energy Startup Powering Native American Protest Camp
  • 6 days Husky Energy Set To Restart Pipeline
  • 6 days Russia, Morocco Sign String Of Energy And Military Deals
  • 6 days Norway Looks To Cut Some Of Its Generous Tax Breaks For EVs
  • 6 days China Set To Continue Crude Oil Buying Spree, IEA Says
  • 6 days India Needs Help To Boost Oil Production
  • 6 days Shell Buys One Of Europe’s Largest EV Charging Networks
  • 6 days Oil Throwback: BP Is Bringing Back The Amoco Brand
  • 7 days Libyan Oil Output Covers 25% Of 2017 Budget Needs
  • 7 days District Judge Rules Dakota Access Can Continue Operating
  • 7 days Surprise Oil Inventory Build Shocks Markets
  • 7 days France’s Biggest Listed Bank To Stop Funding Shale, Oil Sands Projects
  • 7 days Syria’s Kurds Aim To Control Oil-Rich Areas
  • 7 days Chinese Teapots Create $5B JV To Compete With State Firms
Alt Text

Why U.S. Crude Exports Are Booming

U.S. crude oil exports are…

Alt Text

Oil Fundamentals Overturn Geopolitical Risk

Geopolitical risk from Iraq and…

Alt Text

The Geopolitical Consequences Of U.S. Oil Exports

The United States has ramped…

Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing for news outlets such as iNVEZZ and…

More Info

These Oil Majors Just Made Egypt Their Highest Priority

Egypt Oil

Since 2011, political instability and regional insecurity have plagued Egypt’s economy, and the energy sector has not been spared. Until recently a net gas exporter, Egypt turned into a net importer in 2014 after political turmoil plunged the country into continued energy shortages, with domestic demand outstripping supply. In addition, shattered investor confidence and several devaluations of the local currency deterred foreign companies from investing in Egypt.

But Cairo’s fortunes may have turned in August 2015, when Italy’s oil and gas major Eni SpA discovered Zohr, the largest gas field in the Mediterranean ever to be discovered.

Now Eni, as well as UK’s supermajor BP, are betting big on the Egyptian gas exploration and production, and will be making Egypt their top investment destination in the coming years, pouring billions of dollars in their projects there.

Eni plans to invest US$10 billion in Egypt over the next five years, chief executive Claudio Descalzi said at an industry event in Cairo on Tuesday. Egypt will become Eni’s primary investment target in the next two years, the manager added.

BP, for its part, invested more in Egypt than anywhere else last year, CEO Bob Dudley said at the same industry event.

In 2016-17 we’re investing more money in Egypt than any country in the world, so this is important for us, we have confidence in the government,” Bloomberg quoted Dudley as saying. Related: Total Going On The Offensive

According to Hesham Mekawi, North Africa Regional President, BP, as posted on the website of the Egypt Petroleum Show, “BP’s plan is to invest US$13 billion in Egypt by 2020”.

While in Egypt, the CEOs of the two oil giants also finalized the deal in which Eni sold 10 percent of the Shorouk concession, where the Zohr field is located, to BP. Eni’s Descalzi confirmed that production would begin this year. Zohr has total potential of 850 billion cubic meters of gas in place, the Italian company says.

Both Eni and BP – with decades of presence in Egypt – are now saying that projects involving Egypt’s gas would be their priorities in the short-to-medium term. While Eni is pinning its hopes on the largest gas discovery in the Mediterranean, BP – apart from partnering with Eni at Zohr – has included two West Nile Delta projects in its major plans for projects set to come on stream this year. The two West Nile Delta projects are “expected to develop 5 trillion cubic feet of gas resources and 55 million barrels of condensates from two BP-operated offshore concession blocks”, BP says.

Apart from Eni and BP, Shell also has operations in Egypt.

In the second quarter this year, Shell will begin drilling in the West Delta Deep Marine phase 9B gas field, according to the chairman of state-run Egyptian Natural Gas Holding, Mohamed El Masry.

Shell had stopped drilling activities in the Nile delta in March last year because of delayed payments. But Egypt expects to soon draft a repayment schedule to pay US$3.5 billion in arrears it owes to foreign oil and gas companies, Petroleum Minister Tarek El Molla said earlier this week. Related: Are Oil Markets Ignoring Demand?

So while oil majors are still cautious and not splurging on investments following the downturn, Eni and BP are betting on Egyptian gas, and they have financial reasons to do so.

According to Adam Pollard, an upstream analyst at Wood Mackenzie, who spoke to the Financial Times in December last year: “Egypt it is different, because the gas price for newer contracts is relatively high and you are insulated because there is a price floor and a ready market. EGAS [the state gas company] is willing to negotiate the price to encourage investment, meaning that Egypt is bucking the global trend of reduced spending.

According to a report by the International Monetary Fund (IMF) from January this year, the new fields discovered and developed in the Nile delta and in the Mediterranean will help Egypt to increase its gas output from around 4 billion cubic feet per day now to 7.7 billion cubic feet per day over the next three years. This would exceed the country’s domestic needs – currently at 5.2 billion cubic feet per day – and would offer “an excellent opportunity to save excess quantities for future generations and/or export gas to other countries in the region and elsewhere”.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News