BP announces talks are underway on gas exploration and downstream development in the Emirates and Egypt.
BP intends to expand its operations in the Middle East. That decision came in the aftermath of the discoveries and licensing rounds amid a reviving oil price environment. Thus, the company plans to spend $1.8 billion in Egypt next year and $1bn yearly in Abu Dhabi.
“We’ve spent in the last two years $6.8bn in Egypt, and it will be about $1.8bn next year, Khazzan, is way out there and in Oman and the Adco concession each year as well as over a $1bn of capital expenditure each year for Abu Dhabi, so it’s an essential part of BP’s world,” BP group chief executive Bob Dudley said.
Khazzan is BP’s huge gas development project in the Omani desert. It will expectedly produce nearly 1.5 billion cubic feet of gas per day by 2021.
BP is the world’s biggest oil company and the primary explorer of oil in the Middle East. The company reported a second-quarter profit of $2.8bn for the second quarter of the year, with $12.4bn in cash flow. That is more than covered its organic capital expenditure.
Mr Dudley said negotiations were underway to deploy capital in Adnoc’s expanding Ruwais downstream facility, where the state producer is looking to invest $45bn with partners over the next five years.
The downstream strategy announced in May in the presence of Mr Dudley at an investment conference in Abu Dhabi will include doubling current refining and tripling chemicals capacities with plans to build the world’s largest integrated refinery.
“We’ve reviewed, and we’re part of the process with Ruwais. That’s yet to be decided. For us that’s the capital, we’ve been working with Egypt and the government there and involves in the downstream there, trading. We do a lot there,” he said at the British Business Group breakfast briefing in Abu Dhabi on Monday.
Mr Dudley rejected concerns that the major had withdrawn its interests in the Middle East, particularly in Abu Dhabi. Bp has been a long-term partner on the Adma-Opco concessions, now renamed Adnoc Offshore.
“We have had to step back a bit because of the BHP [acquisition], but we’ve been increasing our budgets in Oman, in Egypt,” he said.
BP arranged its purchase of global miner BHP Billiton for $10.5bn earlier this year. Consequently, it looks to increase its presence in the US shale basins.