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International oil firms are looking for maximum bang for their buck. Egypt’s improved investment climate, and higher gas prices, come at just the right time.BP and Eni single out Egypt as a country with improved upstream economics where they would be hiking upstream investment in the face of overall cuts to their capital expenditure (Capex) budgets.
BP’s key Egyptian development is the 1.2mn cfd, $12bn West Nile Delta project (BP 82.75%, Germany’s Dea 17.25%), finally sanctioned in March, after several years of stalling (MEES, 13 March).
Crucial to go-ahead were cost savings from piggybacking on existing subsea and shore infrastructure used by UK firm BG for gathering and processing gas from its nearby West Delta Deep Marine (WDDM) project. Here output has been in precipitous decline, freeing up pipeline and processing capacity (see below).
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