Think of the European offshore sector, and most people’s thoughts turn to the cold waters of the North Sea and its relative lack of new projects. But activity in the far more welcoming waters of the Mediterranean Sea is warming up fast, with Egypt’s offshore sector leading the way.

The Mediterranean is of course a well-established producing province in its own right, with more than 200 active offshore platforms on mature fields in its northern and southern waters. But while countries such as Spain, Italy and Greece have continued to struggle to find much to cheer them in their domestic waters in recent years, the well-publicized discoveries in the eastern Mediterranean offshore Israel have shown that its potential—especially for gas—remains more than achievable.

But to the south lies Egypt, a country that began producing offshore in the 1960s in the Gulf of Suez and which, after the 2011 revolution that caused a hiatus of several years while the industry sat back and waited for the cards to fall, is now full speed ahead with its plans to secure its energy future.

Energy Security

In the vanguard of those efforts offshore in the Mediterranean is BP. Bob Dudley, the group chief executive, commented at the recent World Gas Conference in Paris, “The next challenge is that of energy security—connecting the energy with the people who need it—and doing that affordably. Gas has an increasing part to play here as countries are able to access more diverse sources of supply and develop more of their own.

“But energy security is not only about imports. It’s also about accessing domestic resources that have not yet been developed. We are now seeing examples around the world where such resources are being unlocked when you have the right conditions above the ground as well as the right resources below the ground. In our own business we have seen this at work in places such as Egypt, where we have just been able to sanction a $12 billion investment package,” he continued.

Dudley was referring to the company’s long-established gas resources in the West Nile Delta. BP has done business in Egypt for 50 years and invested more than $25 billion there as one of its largest foreign direct investors.

Through its joint venture (JV) interest in the Gulf of Suez Petroleum Co. (GUPCO), BP collaborates in producing 10% of Egypt’s current oil/condensate output, while its Pharaonic Petroleum Co. (PhPC) and Petrobel JVs produce 30% of the country’s total gas production.

The GUPCO JV operates nine offshore complexes and other satellites totaling more than 110 platforms.

Investment of $12 Billion

But just four years after the revolution, BP has decided to really put its money where its mouth is and commit to its largest investment yet in the country.

The West Nile Delta (WND) agreement, signed in March, enables BP and its 17.25% partner DEA to develop 142 Bcm (5 Tcf) of recoverable gas reserves and 55 MMbbl of condensate from the North Alexandria and West Mediterranean Deep Water areas. With first gas planned for 2017 and peak production penciled in to hit 36 MMcm/d (1.2 Bcf/d), equating to a quarter of the country’s current gas production, the impact of the first phase of this project on Egypt and its impetus on future activity levels in the wider Mediterranean market cannot be overestimated.

WND is BP’s first operated project in Egypt outside of a JV and will see it develop five fields initially in the two concessions. The 21-well development will tie in to existing, upgraded and new infrastructure and target gas and condensate in the Giza, Fayoum, Raven, Taurus and Libra fields, all lying between 65 km and 85 km (40 miles and 53 miles) offshore in water depths of up to 750 m (2,461 ft).

The Taurus and Libra fields in the North Alexandria concession will be a subsea development tied back about 35 km (22 miles) to the existing BG Group-operated Burullus West Delta Deep facilities. A recent project milestone saw the development drilling campaign get underway on the two fields.

Large-bore Trees

OneSubsea, the Cameron-Schlumberger JV company, was also awarded the contract to supply subsea systems for the Taurus Libra fields earlier this year. The scope of supply includes 10 large-bore gas trees and related subsea equipment. First deliveries are expected in first-quarter 2016.

The Giza, Fayoum and Raven fields in the West Med Deep area, meanwhile, will be two subsea-to-shore tiebacks over a distance of about 70 km (43 miles) to the onshore Rosetta plant. This will be modified for Giza/Fayoum and integrated with a newbuild adjacent plant for Raven. Field infrastructure will include new 24-in. gas lines, 6-in. mono-ethylene glycol lines and umbilicals.

BP said that the concessions hold the potential through future exploration to add an additional 142 Bcm to 198 Bcm (5 Tcf to 7 Tcf) of recoverable reserves that would significantly boost or extend the life of the WND project’s production plateau with additional multibillion-dollar investments.

It has already confirmed a recent 100%-owned discovery in the North Damietta Offshore Concession in the East Nile Delta, where the deepwater Atoll-1 well, drilled by the Maersk Discoverer, hit about 50 m (164 ft) of gas pay in high-quality Oligocene sandstones. In 2013 it also discovered the Salamat Field, 15 km (9 miles) to the south.

BP-BG Collaboration

Development of the fields has only been economically viable because of the collaborative relationship between BP and its fellow U.K. operator BG Group after the latter’s subsidiary BG Egypt signed a tie-in agreement with BP, which was the enabler for the whole WND project to get underway.

The Libra and Taurus fields are largely located within BP’s North Alexandria concession but are being connected to BG Egypt’s neighboring West Delta Deep Marine (WDDM) concession infrastructure. Gas from BP’s fields will be processed at the BG Egypt-operated WDDM onshore facilities.

A portion of the Libra Field (the P80 channel) also straddles the boundary between the North Alexandria and the WDDM concessions, and production from this area will be regulated under a unitization agreement.

A separate agreement was also signed by BG Egypt with BP Egypt and DEA, whereby the right of use of the Rosetta onshore facilities will effectively be transferred from BG to BP/ DEA as of mid-2016. BP plans to build new production facilities, integrating the existing Rosetta treatment plant with new HP/HT installations to process gas from the Giza, Fayoum and Raven fields from 2018. BG will continue to hold rights to the Rosetta concession and may process future gas through the WDDM facilities.

HP/HT Aspect

The HP/HT aspect is an important technology area for BP and is directly linked to its ongoing Project 20K initiative. The WND development is designated by BP as having “major project” status, with the operator planning to use some of its learnings from Project 20K on the development.

For Egypt, its most pressing need after emerging from the Arab Spring remains to fix its short- and long-term strategic gas supplies and continue its massive rebuilding process. This includes sealing deals to receive gas from projects offshore Israel in the Mediterranean such as Noble Energy’s Tamar Field.

It has proved itself particularly innovative in this area, with a group of private customers in Egypt agreeing to buy at least $1.2 billion of gas from Tamar and forming a simple but smart plan to use an old existing pipeline built originally to send gas the other way to Israel. The Tamar partners signed a seven-year deal with Dolphinus Holdings, which represents nongovernmental, industrial and commercial consumers in Egypt. The deal sets out the supply of a minimum 5 Bcm (177 Bcf) of gas to be sold in the first three years.

The gas will flow via the pipeline constructed nearly a decade ago by East Mediterranean Gas, a company that once oversaw a long-since defunct Egyptian-Israeli gas deal. Egypt had been selling gas to Israel in a 20-year agreement, but that deal collapsed in 2012.

A new bid round also was confirmed earlier this year for Egypt, with eight offshore blocks in the Mediterranean up for grabs. Those offered are Block 1 (West Arish Marine), Block 2 (East Port Said Marine), Block 3 (North Rumana), Block 4 (North Raas Al-Ish Marine), Block 5 (West Timsah Marine), Block 6 (South Tinin Marine), Block 7 (North Hammad Marine) and Block 8 (East of Alexandria Marine).

Offshore