DEA farms out part of West Nile Delta project to BP
HAMBURG, Germany -- DEA Deutsche Erdoel AG has equalized its working interest and farmed down its stake in the West Nile Delta (WND) project in Egypt to its joint venture partner and operator BP.
The deal includes the sale of a portion of DEA’s stake in the ongoing Phase 1 development of 5 Tcf of gas resources. With the remaining interest of 17.25% in both concessions, WND will remain the largest project in DEA’s portfolio.
The closing of this agreement is subject to approval of the Egyptian General Petroleum Corporation (EGPC).
The $12-billion WND project, which is planned to start production in 2017, is expected to produce 1.2 Bcfd, which constitutes approximately 25% of Egypt’s current gas production.
Thomas Rappuhn, CEO of DEA, said, “WND is a key part of our portfolio and a strategic project for Egypt, which we are committed to delivering with our partner BP. Recognizing the world scale of the development, divestment is in line with our strategy to manage risk through greater portfolio diversification.”
The farm down was also used by DEA to work closely with partner BP to restructure the partnerships agreements to maximize the speed of decision making. By simplifying the DEA holdings to 17.25% across the two concessions North Alexandria and West Mediterranean Deepwater, the efficiency of field cost management and allocation to different fields were improved.
The timing of the farm down coincides with the ramping up of the capital intensive phase of the WND project development. Very recently, a major project milestone has been achieved, when the development drilling campaign started with the spudding of the first development well in the Taurus/Libra field. This is the first of a total of 21 planned development wells in the Taurus, Libra, Giza, Fayoum and Raven fields.
The gas to be produced from these fields will be fed into the country’s national gas grid. The WND project concept maximizes the utilization of existing infrastructure. The Taurus and Libra fields will be developed via a subsea tie-in to the existing Burullus facilities, operated by the Burullus joint venture.
