• Home
• News Article

Match made in heaven

Egyptian-British collaboration in the petroleum sector is a shining success story of fruitful partnership, Sherine Nasr reports
Of all foreign investors in Egypt, British partners in the field of oil, gas and petrochemicals are perhaps among the oldest and most mature. Last week's visit of Prince Andrew, the Duke of York and the United Kingdom's special representative for International Trade and Investment, was a good opportunity to focus the spotlight on the notable accomplishments of three of the major petroleum companies operating in Egypt -- Shell Egypt , British Petroleum (BP) and British Gas ( BG ). According to Sameh Fahmi, minister of petroleum and Mineral Resources, the aggregated volume of investment of these three major British companies in the country has exceeded $4.5 billion.

"It is most likely that Egypt will be able to attract more investment in the field of oil and gas exploration as many sites in the country have not been tapped yet," Fahmi said during his meeting with representatives from the three British companies last week.

In 1911, Shell, the first to enter Egypt, arrived to operate two concessions in Gemsa on the Mediterranean Sea and Hurghada on the Red Sea. Today, Shell Egypt 's business spans upstream oil and gas exploration and downstream marketing services.

Shell is considered one of the world's leading pioneers in the deepwater drilling industry. Currently, Shell Egypt is carrying out an offshore drilling operation, in which the deepest ever deepwater wells, in both the Middle East and the Mediterranean, are being explored.

" Shell Egypt is progressing with its offshore drilling campaign in its North East Mediterranean Deepwater [NEMED] concession," said Eileen Wilkinson, exploration manager at Shell Egypt .

The drilling expedition is carried out 185km offshore and wells are being drilled in depths ranging from 1,500m to as deep as 2,750m.

In the Western Desert, some very notable successes have been achieved through Badr El-Din Petroleum Company (BAPETCO) , which is the operating company for Shell's activities in the Western Desert.

Concluding more than 40 years of oil and gas operations in Egypt, BP has been responsible for almost 40 percent of Egypt's entire oil production.

BP's successful partnership with the Egyptian General Petroleum Corporation ( EGPC ) gave way to the establishment of the Gulf of Suez Petroleum Company (GUPCO), an industry leader and one of the largest oil and gas operations in the region. GUPCO has been operating successfully in the Gulf of Suez and the Western Desert since the 1960s. More recently, the company has ventured into the Nile Delta.

Currently, BP's joint venture, United Gas Derivatives Company (UGDC), owns and operates the largest natural gas liquid (LNG) plant in Egypt. BP also owns 40 percent of the Natural Gas Vehicles Company (NGVC), which operates 51 compressed natural gas (CNG) stations across Egypt.

Active in the country's natural gas business for over 17 years, British Gas ( BG ) Egypt is a leading player in the development of the local gas business, with upstream and midstream investments exceeding $5.5 billion with partners. Operations span the gas chain from exploration through development and production to downstream projects in Liquefied Natural Gas (LNG).

" BG Egypt operates the largest share of Egypt's gas production accounting for over 40 percent of the country's gas output, which supplies both the domestic and the international market," said Ian Hewitt, president of BG Egypt .

The company is responsible for two concessions -- the Rosetta and the West Delta Deep Marine in the Nile Delta.

Through Egyptian Liquefied Natural Gas ( ELNG ) -- a $2 billion liquefaction and export company -- Egyptian gas is now supplying Europe, the US and Asia.

Two weeks ago, Methane Nile Eagle, the first Egyptian-owned LNG ship made its first voyage to transport LNG from ELNG facility at Idku to international markets.

According to Hewitt, BG Egypt 's strategy is to continue to work with partners to realise the full potential in its offshore fields and to develop new acreage further east of the Nile Delta.

"Egypt is an attractive investment destination for BG Group and we are committed to further substantial investment to grow the business and maintain our premier position in Egypt's natural gas development," said Charles Bland, executive vice president of BG Group and co-chair of the Egyptian- British Business Council, which aims at promoting UK investment in Egypt.

In pursuit of this challenge, BG Egypt is planning to invest over $3 billion in an intensified gas exploration and production programme in Egypt over the next four years.

© Al Ahram Weekly 2008