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BG largest foreign investor in Egypt since revolution: President

"BG Egypt invested more than $3.5bn since the 25 January Revolution"

Arshad Sufi, President of British Gas Egypt
Arshad Sufi, President of British Gas Egypt

By Islam Atriss

Arshad Sufi, President of British Gas Egypt, explains the opportunities and the challenges of the Egyptian market, and outlines his trust in the government’s measures to solve the challenges facing international oil companies.

What are BG’s investment plans in 2015?

BG Egypt invested $1.5bn in phase 9a of the development of its West Delta Deep Marine concession, which came on-stream on 22 July 2014, approximately a month ahead of schedule. To date, seven of the nine wells planned have come on-stream. The two remaining wells will be coming on-stream during the first half of 2015. We are currently in talks with the Ministry of Petroleum to agree the terms of future phases of development. BG continues to investigate options to increase the supply of gas into the country. Last year, we invested $38m to conduct a 3D Seismic survey to help us better understand the deeper layers of WDDM. The results of this survey are expected during 2015.

BG Egypt signed an agreement with GDF Suez that allows the latter to tie-in its Burullus concession to BG Egypt’s WDDM sub-sea infrastructure. The agreement, as announced, will add 100m cubic feet of natural gas to Egypt’s domestic supply network by the year 2018.

BG Egypt is also about to sign a similar agreement with BP to allow them to utilise our offshore and onshore infrastructure. The agreement enables BP to tie-in their North Alexandria fields to our infrastructure, as part of our profound belief in our role as partners with the Egyptian government to enable the increase of the country’s domestic gas supply.

Since the 25 January Revolution, we have invested more than $3.5bn, which is the largest number a foreign company has invested. During the past year, we invested $1.5bn. We work hand-in-hand with the government to solve the energy sector problems.

What are the main challenges facing BG in Egypt during the current time?

The private sector faces challenges and obstacles in any country in which they operate. The most prominent challenges that face Egypt are the periods of instability that the country has faced even before the 25 January Revolution, when IOC debts have started to accumulate and led to many investors’ fearing increasing their operations in natural gas or entering the Egyptian market

 Do you have any demands to the government in order to move forward with your investments?

The current government works hard to lower its debts. One of the most important factors is the slow pace of taking decisions like changing the price of natural gas purchases, which is a decision that the current government is taking more seriously through renegotiations in order to reach a price that will cover the high costs of production.

This government is keen to create the right investment climate for investors, and has taken some commendable steps that include the repayment of some of the debts owed to IOCs. BG Egypt has received two payments in 2014, and this has led to the decrease in the amounts owed by EGPC to around $920m. We appreciate this step that reflects the government’s commitment to addressing the challenge of the IOC debts which was one of the biggest obstacles in the energy sector.

What are the latest new areas that the company will start looking for oil and gas in?

We operate two producing Concessions, WDDM and Rosetta, in addition to two exploration Concessions – North Gamasa Offshore and El Burg Offshore. As mentioned earlier, we are processing the results of a Seismic carried over WDDM and which will reveal its results this year, and we are also processing the data from the Notus well, one of the deepest wells drilled in the Mediterranean.

What is new concerning exporting natural gas from Cyprus to Egypt through its networks?

Initial discussions were held with the Cypriot side who is interested in getting their gas production to Egypt in order to take advantage of the Egyptian energy sector experiences and Egypt’s infrastructure. Any gas that comes to Egypt will help create balance between supply and demand in order to fill the energy gap to solve the crisis.

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