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British oil giant to invest $1.5bn in Egyptian resource projects

Egypt has been getting a windfall of investments in recent weeks as the debt-ridden nation seeks means to get its head above water.

BP, one of the world’s oil and gas supermajors, is considering developing gas projects and drilling in Egypt over the next three to four years at a cost of $1.5 billion, Bloomberg reported on 28 February.

This announcement comes after BP said earlier this month that it will be forming a joint venture in Egypt with the UAE Abu Dhabi National Oil Co. (ADNOC) that will initially focus on natural gas. 

The announced joint venture is expected to be formed in the latter half of this year and will be 51 percent owned by BP, with the remaining 49 percent owned by ADNOC. BP will still hold about 70 percent of its interests in Egypt outside of the pact with ADNOC.

BP will contribute interest in three development concessions and exploration agreements, and ADNOC will provide a “proportionate cash contribution” to fund further growth opportunities. 

Egypt has been striking multiple investment deals with regional nations over the past few months; on the one hand, it is a way for Egypt to crawl out of its debt, and on the other, foreign investors are using the nation’s indebted state as leverage for their investments. 

Recently, Egypt offered up Ras al-Gamila, a prime piece of land by the Red Sea in the southern Sinai Peninsula, to Saudi investors with estimates that the price for this nearly 3.5 million square meter plot of land is as much as $15 billion. 

Egypt also announced earlier this month that it had signed a deal with UAE investor group ADQ to develop the Ras El Hekma peninsula; this would bring $35 billion of investments and potentially bring as much as $150 billion in, per Egyptian Prime Minister Mostafa Madbouly. 

In November of last year, Qatar struck a deal to introduce $1.5 billion into the Egyptian industrial sector in 2024, three years following Cairo and Doha’s restoration of ties. 

To deal with its crippling debt, the IMF has vowed to “support” the nation as it could potentially face a refugee crisis as a result of Israel’s planning to ethnically cleanse the Palestinian Gazan population into the Sinai.

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