British oil and gas giant BP announced that it would invest $12 billion, along with a local partner, as part of a deal to develop five trillion cubic feet of gas resources in the west Nile Delta region in Egypt. BP said, in a statement released Friday, that it expects to double its gas supply to Egypt's domestic market this decade when the West Nile Delta (WND) project reaches its peak production.
“WND production is key to Egypt’s energy security,” BP CEO Bob Dudley said, in the statement. “The WND project investment is the largest foreign direct investment in Egypt, and demonstrates our continued confidence in Egypt and our commitment to unlock its energy potential.”
BP, which has significant investments in the country, said that it has about 65 percent equity in the partnership. The production from WND is expected to reach up to 1.2 billion cubic feet a day -- nearly 25 percent of Egypt’s current gas production -- and is expected to begin in 2017.
Currently, BP, through joint ventures with Egypt’s state-owned Egyptian General Petroleum Corporation and the Gulf of Suez Petroleum Company, is responsible for nearly 40 percent of the country’s oil production and close to 30 percent of its gas output.
The announcement comes just days after the London-based company reported a $969 million loss in the fourth quarter of 2014. The company also said that it would cut its capital and exploratory budget by nearly 20 percent to $20 billion. On Friday afternoon, the company's stock was trading down about 0.5 percent on the London Stock Exchange.