ALEXANDRIA: BG Egypt, a subsidiary of British Gas and the biggest natural gas producer in Egypt, anticipates receiving a new installment of its late dues from the government, which promised to repay part of foreign partners’ debts, before December-end, Vice President of operations Heba Ayad told The Cairo Post.
Last month, Egypt’s Ministry of Petroleum said it intends to repay a total of $4.9 billion owed to oil and gas foreign partners within six months. BG Egypt has received around $570 million from the $1.9 billion total debt during the current year, a step that contributed to inject new investments in fields’ development, Ayad said.
In the presence of Egypt’s Minister of Petroleum BG Egypt Celebrated 25 Years of Investment in Egypt in a ceremony late Tuesday on the sidelines of the 7th Mediterranean Offshore Conference (MOC) held in Alexandria December 9- 11.
In his speech, BG Egypt President Arshad Sufi praised the efforts of the Egyptian government represented by the Ministry of Petroleum to handle the challenges facing the international companies working in the oil and gas sector.
“As partners, both the Egyptian government and BG Group have contributed in developing the natural gas industry in Egypt,” Sufi said.
“We have also been partnering with the Egyptian government to further enhance the local industry through investing in the latest technologies and state-of-the-art infrastructure in addition to investing in training and developing Egyptian standards over the last 25 years,” he added.
BG Egypt has invested more than $14 billion along with its partners over the past 25 years, according to Sufi, who stressed that “BG Egypt’s commitment to the Egyptian market was also tested over the last three years through investing more than $3.5 billion in operations’ development while the country was struck by political and economic unrest.”
Sufi further detailed that his company has invested $1.5 billion in phase 9A of its West Delta Deep Marine (WDDM) concession during FY 2013/2014. This phase came on-stream on July.22, approximately a month ahead of schedule, according to Sufi.
BG Egypt signed an agreement with GDF Suez in November that allows the latter to tie-in its Burullus concession to BG Egypt’s WDDM sub-sea infrastructure. “The agreement will add an additional 100 million cubic feet of natural gas to Egypt’s domestic supply network by the year 2018,” Sufi stated.
Egypt plans to borrow $2 billion to help provide the required finances for the repayments, is seeking to pay back 60 percent of the arrears by the end of 2014.
This step is aimed at encouraging foreign companies to boost exploration and production, in order to ease an energy shortage that reached its worst level this summer with daily powers cuts that lasted for 12 hours at a time in some areas.
In July, President Abdel Fatah al-Sisi raised fuel prices and cut energy subsidies in the new budget by 10 percent, saving around 44 billion EGP. The budget amounted to 100.3 billion EGP, compared to 144 billion EGP in the previous year.
The government plans to remove energy subsidies completely within three to five years, Minister of Finance Hani Kadry has said. The government is also negotiating new deals for natural gas exploration to meet growing demand, notably for running power plants.