BP today announced that it has signed a Heads of Agreement (HoA) with the Egyptian Minister of Petroleum, His Excellency Eng. Tarek El Molla, regarding the acceleration of the development of the recent Atoll gas discovery. The Atoll discovery (BP 100%) in the North Damietta Offshore Concession in the East Nile Delta, offshore Egypt was announced in March 2015.
The agreement is expected to enable first production to be expedited from an estimated 1.5 trillion cubic feet (tcf) of gas resources and 31 million barrels (mmbbl) of condensates in the Atoll field to the domestic market, with production anticipated to begin in 2018.
Commenting on the agreement, BP Group Chief Executive Bob Dudley said, “We are pleased to be making rapid progress towards the development of Atoll less than eight months after the announcement of its discovery. This is further demonstration of our continued confidence in Egypt – a key growth area for BP – and our commitment to continue to invest to unlock its energy potential.”
Full field development of Atoll is expected to consist of two phases. The first phase will consist of two development wells tied back to existing infrastructure, with production expected to start up in 2018. Success of this first phase is expected to trigger additional investment and further wells to increase production.
Hesham Mekawi, BP North Africa Regional President said, “BP is proud of its longstanding partnership with Egypt over the past 50 years. Today’s agreement, which will bring additional production to the Egyptian domestic market and help to meet Egypt’s energy demands, is another important milestone for BP in Egypt following our recently announced West Nile Delta major project.”
BP also expects to continue to invest in its existing oil operations led by its joint venture Gulf of Suez Petroleum Co. (GUPCO) and gas operations led by the Pharaonic Petroleum Co. (PhPC) joint venture, as well as continuing to progress its exploration program in the Nile Delta.
BP expects to sustain its current oil production and double its gas production in Egypt before the end of the decade to reach 2.5bcfd with partners, which represents more than 50% of Egypt’s current gas production.
Development of Atoll will be executed and operated by Pharaonic Petroleum Co. (PhPC), BP’s joint venture with EGAS and Eni.
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This press release contains certain forward-looking statements concerning the Heads of Agreement between BP and the Egyptian Minister of Petroleum regarding the acceleration of the development of the recent Atoll gas discovery, including expectations regarding the timing of production and the possibility of additional investments in the Atoll field and the execution and operation thereof; plans and expectations regarding BP’s existing operations and current and future oil and gas production in Egypt; and plans and expectations regarding BP’s development of and investment in the 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 “Principal risks and uncertainties” in our Stock Exchange Announcement for the period ended 30 June 2015 and under "Risk factors" in our Annual Report and Form 20-F 2014.
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