Oil chiefs from Total and BP see varied investment opportunities in Egypt, where economic reforms and major gas discoveries have set the path for the country to establish an international gas trading and distribution hub.
“For the last two years in a row, we have been investing more in Egypt than in any other country in the world,” BP CEO Bob Dudley said at the Egypt Petroleum Show (EGYPS) on Monday, adding that it the company has a deep commitment to Egypt.
The company in 2016 bought a 10 per stake stake in the mega-field of Eni-operated Zohr field in the Mediterranean Sea.
“We have great faith in Egypt and the reforms that are being made.There is a great gas business along the northern shore and that will help make Egypt not only a consumption country but a hub for the region,” Dudley added. “We’ve been working in Egypt for 55 years through the ups and downs, so we have a deep commitment. It is a partnership here.”
Meanwhile, Total’s Chairman and CEO Patrick Pouyanné said the company is considering developing downstream petrochemicals in Egypt after having acquired a stake in Idku, one of its two liquefaction plants.
“We have been less fortunate in energy exploration but we have better to develop a retail network and build market share and we enjoy it,” he said.
Total last year acquired Engie’s portfolio of upstream liquefied natural gas (LNG) assets, which include participating interests in liquefaction plants, long term LNG sales and purchase agreements, an LNG tanker fleet as well as access to regasification capacities in Europe.
“There is clearly in the region and particularly in Egypt, a strong natural gas resource - it will also be a base to develop it to chemical in the future. We want to become a part of that in Egypt,” Pouyanné said.
The two chiefs also discussed the way forward for the oil and gas industry. While BP had one of its safest years operationally, Total’s Pouyanné said the company works towards value by keeping a low breakeven price, which is at $30 a barrel for its operations.
“In our industry, we must focus on one main element, which is what is the breakeven of oil…
We can’t control the price .. the only way forward is to lower the breakeven of the company,” Pouyanné said, adding that although companies enjoyed higher profits during high oil prices, Total was more resilient because of its downstream integration of petrochemical and marketing.