Energy explorers flock to Egypt

CAIRO, July 20 (UPI) -- The Egyptian Energy Ministry signed off on lucrative natural gas deals to tap into one of the richest basins in the Mediterranean, energy companies said.

The U.S. Energy Information Agency reports that recent major gas discoveries in Egypt put the country just behind Nigeria and Algeria in terms of African gas producers with around 58.5 trillion cubic feet of proven gas reserves.

To that end, British energy company BP and Germany's RWE signed off on a $9 billion deal in Egypt to exploit gas reserves in the North Alexandria and West Mediterranean deep-water reserves.

BP said estimated production there could reach 1 billion cubic feet per day once first gas goes on stream in late 2014.

"This agreement unlocks a new phase in realizing the huge potential of the Nile Delta basin, which will play an important role in meeting regional energy security needs in the coming decades," said BP Chief Executive Tony Hayward.

Meanwhile, Italian energy company Eni announced that it started production at the Tuna field off the Mediterranean coast of Egypt. The company said in a statement that it would begin producing around 158 million cubic feet of gas per day by the end of September.

Eni said the development is evidence that Egypt holds some of the largest untapped gas deposits in the region.