Company gets ready for next phase of growth
CAIRO: British Gas (BG) has announced that they have signed a new concession agreement with Petronas on Monday. The new concession is right on schedule with the company’s plans for expansion.
As one of the heavyweights in the liquefied natural gas (LNG) business in Egypt, BG, which produces close to 50 percent of overall gas production in Egypt, is aggressively seeking to maintain its strong position in the oil and gas industry by inking concession deal after deal.
“BG Egypt is now embarking on its next phase of growth, says Ian Hewitt, BG Egypt president. “We are working on aggressive forward exploration plans and the sanctioning of the third train. This will be a further step in establishing Egypt as a regional gas hub.
BG Egypt, along with its partner Petronas, another important international player in the industry, signed the concession agreement for the exploration of gas and oil in the North Sidi Kerir Deep Offshore Area with the Egyptian government, following ratification by the People’s Assembly, the Minister of Petroleum Sameh Fahmy, BG Egypt President Ian Hewitt and Petronas President Ho Wang Kin at the Ministry of Petroleum’s offices.
Currently, BG Egypt is the operator of the field and holds a 50 percent interest in the North Sidi Kerir Deep Offshore Concession Area, which is located offshore the Nile Delta in the Mediterranean Sea, adjacent to the West Delta Deep Marine Concession Area. Petronas Carigali Overseas holds the remaining 50 percent interest.
The North Sidi Kerir Deep concession was awarded in 2005 and covers 1,949 square km in water depths of approximately 1,000 to 2,000 meters, according to an official statement made by BG Egypt.
“We are delighted to be granted this concession area. We plan to acquire 3D Seismic in 2007 and expect to drill the first well in 2008, said Ian Hewitt at the signing ceremony.
BG has managed to become a noted ringleader in the LNG industry in the country by taking advantage of LNG’s boom years and investing in the development of a number of fields, leading BG to hold a number of aggressive exploration programs in its lap.
One of the most strategic decisions the company has undertaken was the purchase of the entire output of train two of the $1.9 billion Egyptian LNG project under a 20-year agreement, making the company one of the project’s major shareholders.
Each one of the shipments that sails out of train two in Idku is worth $25 million to $30 million. When they were budgeted, they were at a price of $8 million to $9 million dollars. By lifting the trains ahead of schedule, the company, along with its partners, were able to deliver during winter when prices are high, thus amounting to a hefty sum of extra value, BG Egypt’s former president, Oscar Prieto told The Daily Star Egypt in December 2005.
The company has also taken a big bite of profit from their concession agreements.
BG signed concession contracts for two large areas offshore of the Nile Delta. El Manzala and El Burg, (with Egyptian Holding Company for Natural Gas) are committed to drilling an exploration well in 2007.
The company also operates two gas-producing areas offshore the Nile Delta, the Rosetta Concession (with Rashpetco) and West Delta Deep Marine (WDDM) Concession (with Burullus Gas Company).
An exploration program is also underway to secure access to new reserves in the WDDM Concession.
BG has been successful in this area, having previously drilled 16 profitable exploration and appraisal wells in WDDM since 1997, resulting in the discovery of nine gas fields.
The company’s portfolio includes over 30 new projects in different stages of development, with current investments amounting to $4 billion and a commitment to allocate more than $850 million over the next six years toward the development of existing fields.
