Egypt sees production from BP project in 2017

Updated 28 June 2014
0

Egypt sees production from BP project in 2017

AL-ASEEL OIL FIELD, Egypt: Egypt's oil minister has said that BP's $10 billion gas project, stalled for three years, had restarted and that production would begin in 2017, a sign of progress in efforts to ease the worst energy crunch in decades.
In another move that could help improve investor confidence, Sherif Ismail also said Egypt would pay $1.5 billion of the money it owed to foreign energy companies by the end of 2014.
The minister told reporters on a visit to Al-Aseel oil field in the western desert that production at BP's North Alexandria concession would begin in 2017, with 450 million cubic feet per day initially being extracted. He said output would rise to 800 million cubic feet per day in 2018.
Those volumes would mean a significant boost to current production, which Ismail told a local newspaper this month was expected to reach 5.2 billion cubic feet (bcf) per day by the end of December.
The news comes a day after Algeria agreed to ship five cargoes of liquefied natural gas (LNG) to Egypt this year, according to a source at Algerian state energy firm Sonatrach.
The total amount of the Algerian shipments will be enough to meet around three days' worth of average daily consumption, according to Reuters calculations, enough to provide serious short-term relief to gas shortages that have resulted in regular power cuts in Egypt this year.
"Gas imports are planned for a period of the next four to five years, until energy self-sufficiency is achieved," Ismail told reporters on Thursday, referring to overall imports.
Political turmoil and violence since the 2011 revolt hit the economy hard. The government has struggled to pay foreign companies for gas and work on some major new gas projects has ground to a halt at a time when generous state subsidies are stoking growing demand.
Egypt earlier this year forecast gas production would fail to meet surging domestic demand in the next fiscal year that begins July 1, signaling more blackouts ahead.
Egypt's steadily declining gas production has been exacerbated by foreign firms' wariness about increasing investment when the government owes them money and has diverted most of the gas promised for exports to meet domestic demand.
The near-daily power cuts are forcing energy-intensive industries to close factories or sharply cut production.
BG Group's problems in Egypt have affected its LNG unit so much that it cut production forecasts for the year and served "force majeure" notices to affected buyers and lenders.
Egypt's new President Abdel Fattah El-Sissi may soon be forced to tackle challenges in the sector in order to boost production and draw back wary investors.
But given that power cuts and long lines at fuel stations have stoked public anger in recent years, he will have to act carefully when reforming the wasteful subsidies system that accounts for a quarter of government spending.
In another move that could help improve investor confidence, Ismail said Egypt would pay $1.5 billion of the money it owed to foreign energy companies by the end of 2014.
The latest government figures put Egypt's debts to foreign oil companies operating there at $5.7 billion, but officials including Ismail acknowledge that debts are mounting even as the government pays off what it owes now.


Tunisia to almost double gas production this year

Updated 34 min 34 sec ago
0

Tunisia to almost double gas production this year

  • The project will be jointly owned by Austria’s OMV and Tunisian National Oil Company ETAP
  • It will include investments of about $700 million

TUNIS: Tunisia will almost double production of natural gas to about 65,000 barrels of oil equivalent per day this year, the industry and energy minister, Slim Feriani, told Reuters on Friday.
The country’s gas output will jump from 35,000 barrels of oil equivalent per day (boed) when the southern Nawara gas field comes onstream in June, Feriani said.
“We will raise our production by about 30,000 barrels of oil equivalent when the Nawara project in the south will start,” Feriani told Reuters in interview.
This project will be jointly owned by Austria’s OMV and Tunisian National Oil Company ETAP with investments of about $700 million.
Feriani also said Tunisia was seeking to attract about $2 billion in foreign investment to produce 1,900 megawatts (MW) of renewable energy in three years. “We will start launching international bids for the production of renewable wind and sun energy. We aim to produce 1,900 MW by investment of up to $2 billion until 2022,” he said.
This would represent about 22 percent of the country’s electricity production.
PHOSPHATE
Tunisia also plans to raise production of phosphate from 3 million tons to 5 million in 2019, he said.
Raising the output will boost economic growth and provide revenue to revive its faltering economy, the minister said.
Phosphate exports are a key source of foreign currency reserves, which have dropped to levels worth just 82 days of imports, according to Tunisia’s central bank.
Tunisia produced about 8.2 million tons of phosphate in 2010 but output dropped after its 2011 revolution. Annual output has not exceeded 4.5 million tons since 2011.
Feriani said lower production has caused Tunisia to lose markets and about $1 billion each year.
Phosphate exports were hit by repeated protests in the main producing region of Gafsa, where unemployed youth demanding jobs blockaded rail transport.