BP gives green light for $12bn Egyptian investment project
Updated : 12:20
BP has confirmed it is to plough ahead with its £12bn West Nile Delta (WND) project in Egypt, with production slated to begin in 2017.
The oil and gas giant said the 65%-owned project would produce up to 1.2bn cubic feet a day for sale into the local market, roughly a quarter of Egypt’s current gas production.
BP said this would help meet what it anticipated would be strong growth in local demand for energy.
BP and its local partner will need to invest an estimated $12bn to extract the 5trn cubic feet (tcf) of gas produced from two BP-operated offshore concession blocks.
The FTSE 100-listed company added that it believes there is the potential through future exploration to add a further 5-7tcf through additional investments.
Meanwhile, Santander downgraded BP to 'underweight' from 'hold' primarily on valuation.
Santander analysts said BP offers the weakest volume uplift of peers due mainly to divestments and a weak cash flow outlook.
Indeed they see a "material crunch" on earnings and cash flow this year and expects losses in upstream through 2017 as well as remaining cautious for Russia support.