BP's phase three of the $12 billion West Nile Delta project offshore Egypt will come online by the end of this year, nearly 12 months behind the earlier scheduled deadline, the company said in a conference call this week.
The third phase includes the development of the Raven field, located in the offshore area encompassing five gas fields across the North Alexandria and West Mediterranean Deepwater offshore concession blocks which BP is developing in phases.
“The Raven project in Egypt is now expected to come on stream around the end of 2020,” said BP during the quarterly results call. To remind, BP had in February 2019 said it would bring Raven online by the end of 2019.
BP holds an 82.75% stake in the project. DEA Deutsche Erdoel holds the remaining 17,25%.
BP has already brought online the first and second phases of the West Delta Nile project including the fields of Taurus and Libra that started production in 2017.
During the second stage, which involved the Gizan and Fayoum project, eight gas wells, producing an estimated 400 million cubic feet of gas/day was completed a year ago with BP optimistic the output will rise to 700 million cubic feet of gas daily in the medium to long term.
The project was developed as deepwater, long-distance tie-back to an existing onshore plant.
BP North Africa regional president Hesham Mekawi previously said: “production from Giza and Fayoum will sustain local energy supply and keep us (BP) on track to triple our net production from Egypt by 2020.”
Completion of the West Nile Delta project by BP would be a major boost for Egypt as it is likely to produce an estimated 1.4 billion cubic feet daily, an equivalent of slightly more than 20% of the North African country’s current gas production.
BP said the gas to be produced from the West Nile Delta project will be “fed into the national gas grid.”
There is momentum in Egypt for ramping up of offshore gas production in the country after the government overcame the challenges of a decelerating economy on the back of increasing domestic oil consumption and imports to reduce substantially the $6.3 billion debt owed to foreign petroleum companies.
Last December, President Abdel Fattah el-Sisi’s government announced it had paid $5.4 billion accrued in the previous seven years with the remaining $900 million expected to be paid out by the end of the financial year.
If BP and its partner DEA do achieve the production of the projected 1.2 to 1.4 billion cubic feet daily from the West Nile Delta project, it will help Egypt meet the increasing consumer demand for gas, which analysts previously said has surpassed the global consumption rate.
Furthermore, Egypt had previously reported a reduction in gas production at least until Eni’s discovery of the giant Zohr gas discovery in the Mediterranean Sea, which if combined with other latest discoveries is likely to wean off the North African country from too much reliance on imports to power its ambitious industrial expansion plan.