British oil major BP plans to invest more than $12 billion in Egypt over the next five years, and to double its gas supplies to the local market in the next decade, the country manager of BP Egypt said on Tuesday. “BP is committed to unlock Egypt’s oil and gas potential and gradually double its gas supply during this decade.
This will be achieved by injecting more than $12 billion in the next five years, Hesham Mekawi told an energy conference in Alexandria, referring to a project to develop the West Nile Delta. BP is one of the largest foreign investors in Egypt, which wants foreign companies to help ease one of its worst energy crises in decades.
Most international energy firms entered Egypt to develop energy for export, but as consumption has increased and production decreased, the government has diverted energy supplies to the domestic market, hurting companies’ profits. Egypt plans to repay all its $4.9 billion debt to foreign oil and gas companies within six months, the oil ministry said last month, a move it hopes will prompt them to boost exploration and ease the worst energy crunch in decades.
The country has delayed payments to oil and gas firms as its economy has been hammered by almost three years of instability since a popular uprising ousted autocrat Hosni Mubarak in 2011. Arrears began to accumulate before the revolt, but worsening state finances saw the debts mount to billions of dollars while the government diverted gas earmarked for export to meet domestic demand.