BP Restarts Stalled Gas Project in Egypt

BP’s $10 billion gas project in North Alexandria concession, which was stalled for three years, has restated and production is expected by 2017, Egypt’s oil minister said Thursday.

According to news agency Reuters, Sherif Ismail, who was on a visit to Al-Aseel oil field in the western desert told reporters that initially 450 million cubic feet per day of gas is expected to be extracted.

Output would rise to 800 million cubic feet per day in 2018, the minister said.

Many new gas projects in the country have been stalled as the government has found it difficult to play foreign companies. The North African nation has diverted most of the gas produced to domestic market where demand has surged due to generous state subsides. This diversion has resulted in fall in exports.

Egypt's natural gas exports in April dropped by 80.9 percent compared with corresponding period last year, state-run Information and Decision Support Centre (IDSC) said earlier this month.

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, adds Reuters.

According to the news agency, the government has promised to pay companies including BG Group and BP $3 billion by the end of 2017 as it tries to lure back investors to help it develop its reserves.

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