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BP sanctions “fast-track” development of Atoll discovery in Egypt

Release date: 20 June 2016

BP announced today that together with the Egyptian Natural Gas Holding Company (EGAS), it has sanctioned development of the Atoll Phase One project which is an early production scheme that will bring up to 300 million cubic feet a day (mmscfd) gross of gas to the Egyptian domestic gas market starting in the first half of 2018. BP has a 100% interest in the concession.

 

Hesham Mekawi, Regional President, BP North Africa commented: “BP is proud to progress the acceleration of the Atoll project which will bring critical gas to the Egyptian market and establish a new material hub offshore East Nile Delta. Our confidence in the prospectivity of the area along with our ongoing commitment to Egypt and our successful history of partnership with the Ministry of Petroleum, EGPC and EGAS is allowing us to fast track Atoll from discovery to production in less than three years which is a significant achievement.”  

 

BP recently completed multiple transportation and processing agreements accelerating the development of the Atoll field which contains an estimated 1.5 trillion cubic feet (tcf) of gas and 31 million barrels (mmbbl) of condensates. Onshore processing will be handled by the existing West Harbour gas processing facilities.

 

BP announced the Atoll discovery in March 2015. The Atoll-1 deepwater exploration discovery well in the North Damietta Offshore concession in East Nile Delta was drilled using the 6th generation semi-submersible rig Maersk Discoverer. The exploration well reached a depth of 6400 metres and penetrated approximately 50 metres of gas pay in high quality sandstones. The Atoll Heads of Agreement was signed by His Excellency Tarek El Molla, Egyptian Minister of Petroleum and Mineral Resources and Bob Dudley, BP Group Chief Executive in November 2015, just eight months after the discovery.

 

Atoll Phase One is an early production scheme (EPS) involving the recompletion of the existing exploration well as a producing well, the drilling of two additional wells and the installation of the necessary tie-ins and facilities required to produce from the field.  

 

The Atoll wells will be drilled by the DS-6 rig which arrived in Egypt last month and is expected to start drilling in August for roughly the next 24 months. Success of the Atoll Phase One EPS could lead to further investment in the Atoll Phase Two full field development.

Further information

Contacts

 

BP Egypt office, +202 2519 9915

BP Press Office, London, +44 (0)207 496 4076, bppress@bp.com

Notes to editors

 

  • BP has a long and successful track record in Egypt stretching back over 50 years with investments of approximately $30 billion, making BP one of the largest foreign investors in the country. In Egypt, BP’s business is primarily in oil and gas exploration and production. BP is working to meet Egypt’s domestic market growth by actively exploring in the Nile Delta and investing to add production from existing discoveries.
  • To date, BP Egypt, in collaboration with the Gulf of Suez Petroleum Company (GUPCO), BP’s joint venture (JV) Company with the Egyptian General Petroleum Company (EGPC), has produced almost 40% of Egypt’s entire oil production, and currently produces almost 10% of Egypt’s annual oil and condensate.
  • In addition, through joint ventures with EGPC/EGAS and IEOC (ENI) the Pharaonic Petroleum Company (PhPC) and Petrobel BP currently produces close to 30% of Egypt's total gas.
  • The West Nile Delta (WND) Project is a strategic project for BP. BP is the operator of the project. The West Nile Delta project, involves the development of 5 trillion cubic feet of gas resources and 55 million barrels of condensates. Production from WND is expected to be around 1.2 billion cubic feet a day (bcf/d), equivalent to about 30% of Egypt’s current gas production. All the produced gas will be fed into the country’s national gas grid. Production is expected to start in 2017.
  • BP has made a series of discoveries in Egypt in recent years including Taurt North, Seth South and Salmon and Rahamat, Satis, Hodoa, Notus, Salamat and Atoll.
  • In the North Damietta Offshore concession (NDO – BP 100% Working Interest), BP made 2 significant Oligocene discoveries Salamat (2013) and Atoll (2015).
  • BP is a 33 per cent shareholder of a natural gas liquids (NGL) plant extracting LPG and propane, United Gas Derivatives Company (UGDC) in partnership with ENI/IEOC and GASCO (the Egyptian midstream gas distribution company).
  • BP is also present in the downstream sector through Natural Gas Vehicles Company (NGVC, BP 40 per cent) which was established in September 1995 as the first company in Africa and the Middle East to commercialize natural gas as an alternative fuel for vehicles.

Cautionary statement

 

In order to utilize the ‘safe harbor’ provisions of the United States Private Securities Litigation Reform Act of 1995 (the ‘PSLRA’), BP is providing the following cautionary statement. This press release contains certain forward-looking statements concerning the development of the Atoll Phase One project, including expectations regarding drilling and production and the timing thereof, onshore processing and future wells and facilities; plans and expectations regarding the possibility of additional investment in the Atoll field and of further exploration in the Nile Delta; and expectations regarding BP’s West Nile Delta project and the estimated levels of daily production thereof. Actual results may differ from those expressed in such statements, depending on a variety of factors including changes in public expectations and other changes to business conditions; the timing, quantum and nature of divestments; the receipt of relevant third-party and/or regulatory approvals; future levels of industry product supply; demand and pricing; OPEC quota restrictions; PSA effects; operational problems; regulatory or legal actions; economic and financial conditions generally or in various countries and regions; political stability and economic growth in relevant areas of the world; changes in laws and governmental regulations; exchange rate fluctuations; development and use of new technology; the success or otherwise of partnering; the actions of competitors, trading partners and others; natural disasters and adverse weather conditions; changes in public expectations and other changes to business conditions; wars and acts of terrorism, cyber-attacks or sabotage; and other factors discussed under "Risk factors" in our Annual Report and Form 20-F 2015.

 

This press release contains references to non-proved resources and production outlooks based on non-proved resources that the SEC's rules prohibit us from including in our filings with the SEC. U.S. investors are urged to consider closely the disclosures in our Form 20-F, SEC File No. 1-06262. This form is available on our website at www.bp.com. You can also obtain this form from the SEC by calling 1-800-SEC-0330 or by logging on to their website at www.sec.gov