Eng. Sameh Fahmy, Egypt's Minister of Petroleum, and Hesham Mekawi, BP Egypt President and General Manager, signed the agreements to extend the MCA by 20 years and the South Gharib concession by 10 years from the date of signing.
Extension of the MCA and South Gharib concessions with modified terms for BP will extend the life of the existing oil fields, maximize the recovery of the remaining reserves in these two concessions and provide a foundation for growth through future exploration.
The agreements enable BP to continue investing in these concessions and commit it to invest at least $615 million over 7 years in exploration and development activities, as well as renewing and upgrading the existing facilities and infrastructure across the Gulf of Suez.
Operations in these two concessions are conducted by Gulf of Suez Petroleum Company (GUPCO), which is a 50/50 joint venture between BP and Egyptian General Petroleum Corporation (EGPC), and the agreements create new opportunities for the development of GUPCO through continued investment, transfer of knowledge and application of new technologies and reservoir management practices.
Commenting on the agreements, Hesham Mekawi said: "BP is very pleased to have been awarded these extensions. They pave the way for a long-term sustainable oil business. We have a long and successful history of working here in Egypt, and we are delighted to have the chance to further grow our business."
The Merged Concession Agreement and South Gharib Concession represent about 80 per cent of BP's total oil business in Egypt. Production from these concessions amounts to over 100,000 barrels of oil equivalent a day (boed). Through Gupco, the 50/50 joint venture with EGPC, BP has been involved in the two concessions since the 1960s. Since 1967 GUPCO has produced some 4.7 billion barrels of oil, more than one third of the country's total oil production, and invested more than $9 billion, in these areas.
In recent years a number of significant discoveries have been made in the Gulf of Suez including Saqqara and Edfu.
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