BP will spend US$2.8 billion next year on expanding its operations in the Middle East, a company's chief executive told The National in an exclusive interview. The supermajor will spend US$1 billion annually in Abu Dhabi, Bob Dudley told the Emirati daily, and another US$1.8 billion will be spent in Egypt in 2019.
Recovering oil prices are the main reason behind this investment decision, but new discoveries in the region and new licensing rounds have also helped considerably, likely strengthening the positive outlook of BP for the Middle East.
"We've spent in the last two years $6.8 billion in Egypt and it will be about $1.8 billion dollars next year, Khazzan, is way out there and in Oman and the Adco concession each year as well is well over a $1 billion of capital expenditure each year for Abu Dhabi, so it's a really important part of BP's world," Dudley told The National.
One of the projects that BP is interested in investing in the UAE is the Ruwais refinery expansion, which Adnoc, Abu Dhabi's state oil company, plans to spend US$45 billion on over five years, in partnership with other companies.
The Ruwais refinery currently has a daily capacity of 132,000 bpd and after the expansion this will rise to 280,000 bpd.
BP also has a solid and long-standing presence in Egypt where it has produced a cumulative 40 percent of total crude oil output. To date, BP accounts for a tenth of Egypt's oil production and more than half of its gas production. Recently, the company tried to sell US$500 million worth of its assets in the North African country to SDX Energy, but the talks fell through.
Elsewhere in the Middle East, BP earlier this year announced it would launch the second phase of development of the Khazzan gas field in Oman, which will bring its total production to 1.5 billion cu ft of gas daily.
By Irina Slav for Oilprice.com
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