bp to develop Egyptian natural gas, drilling projects with $1.5 billion investment

(Bloomberg) – bp Plc plans to invest about $1.5 billion in Egypt during the next few years as it seeks to develop natural gas projects and drilling in the North African country.

The spending, which will be net to bp, follows the London-based major’s announcement earlier this month it will form a gas-focused joint venture in Egypt with ADNOC.

The new spending will occur during the next three to four years, a bp spokesperson said in an emailed response to questions. bp will continue to hold about 70% of its existing interests in Egypt outside the joint venture with ADNOC.

That partnership, expected to be completed in the second half of this year, will include interests in three of bp’s development concessions as well as exploration projects. ADNOC will provide a “proportionate cash contribution” to help fund future growth opportunities, the companies said at the time.

Egypt’s natural gas production has fallen to the lowest levels in years as domestic output has been hit by natural declines at fields, according to Bloomberg calculations.

At the same time, the country has been shipping excess liquefied natural gas to Europe outside the summer months as the continent seeks to cushion the blow from Russia choking supplies.