BG Egypt not to halt works in some development wells- source

Big 5

An official source at Egyptian petroleum ministry negated that BG Egypt has halted work at some development projects in Egypt after the company could not reach agreement over the price of gas with the government.

He noted Tuesday that there is no current phase named 9A+ while 9B phase has not entered operation.

On other side, an official at Egyptian General Petroleum Corp (EGPC), told Reuters Tuesday that “BG has stopped work at 9A+ and 9B after failure to reach an agreement on the fixed price to be paid for extracted gas, and it withdrew rigs working on the 9A+ wells on the seventh of March,”

The source added that negotiations on developing natural gas at phase 9B has not stopped yet and the ministry is currently in talks over re-scheduling the project to start developmental processes.

The Royal Dutch Shell is committed to all articles of the original agreement that signed with BG over West Delta concession area in deepwater of Mediterranean Sea, the source noted.

About changing gas price for foreign partners in petroleum agreements, the source stated that the aim of this step is to accelerate the developmental plans beside boosting production.

He clarified that amending prices is dominated by achieving balance for all parties as well as reaching economics that suit the costs of developing the newly-discovered gas wells.

Egypt has over the past year raised the price it pays many international oil companies for natural gas production in order to encourage more investment in the sector.

BG Egypt has previously worked out deals with Egypt’s EGPC to earn the higher price of $5.88 at other development wells, which it is continuing work on.

Egypt, which is facing an acute foreign currency shortage, has delayed paying foreign petroleum companies their arrears, which reached about $3 billion at the end of December 2015.