Egyptian gas momentum picks up with Atoll, Zohr fields

BP announced gas was being produced from its Atoll basin offshore Egypt, seven months ahead of schedule, less than two years after the initial discovery and 33 percent under the initial cost estimate.

"Delivering this project at such an unprecedented pace, less than two years after sanction, and with an impeccable safety record is a tremendous achievement," BP Regional President Hesham Mekawi said in a statement.

The first phase of the project is yielding about 350 million cubic feet of natural gas and 10,000 barrels of an ultra-light product called condensate each day. Gas produced from the Atoll field is sent to the Egyptian grid.

BP's announcement of the startup of its first major project of the year comes less than two months after Italian energy company Eni started production at the Zohr gas field, the largest gas discovery ever made in Egyptian waters. Located about 120 miles offshore, the field holds roughly 5.5 billion barrels of oil equivalent.

Egypt aims to become a regional hub for gas and liquefied natural gas, though availability at the domestic sector could complicate growth. Eni said the startup of Zohr, online less than two years after the initial commercial discovery, would reshape the Egyptian energy sector.

The International Monetary Fund said in January that Egypt's population expansion means it needs to create about 700,000 new jobs each year. That's only possible, however, if the state takes a back seat to the private sector.

Two years ago, the IMF said the economic potential for Egypt is "immense" and significant investments in the energy sector and major new natural gas discoveries are contributing to its potential.

For BP, the Atoll project represents close to $1 billion in investments.

"This is a further demonstration of our commitment to help realize Egypt's oil and gas potential and meet the increasing demand from its growing population," CEO Bob Dudley said.