Successful oil and gas digs BRITISH Petroleum Egypt (BP) announced two major oil and gas discoveries last week. An important crude oil discovery was made in the North Shadwan concession in the southern part of the Gulf of Suez. The discovery is the first in the area in 10 years and also the first to be drilled by BP using recently acquired high-quality ocean bottom cable seismic data. The well was drilled in shallow water and penetrated 68 metres of oil bearing sandstone in the highly productive Nubia formation. "Oil samples recovered from the well indicate excellent quality light crude oil," according to Hesham Mekawi, president and general manager of BP Egypt, who added that this is BP's fourth Nubia success since 2001. Other wells are Saqqara, Edfu and Luli, of which some are still under development or already in production. Meanwhile, the third significant gas discovery in the Nile Delta was also announced by the company. Located 50km north of Damietta, the Satis discovery lies in the North Al-Burg offshore at the Nile Delta Concession, and is drilled to a record depth of more than 6,500m. "Satis is a major technical achievement that demonstrates the great potential of the deeper reservoirs in the Nile Delta, and it will require further appraisal," revealed Andy Inglis, BP's chief executive for exploration and production. Inglis added that the new discovery will underscore BP's position as a major producer in a growing Egyptian gas market for many years to come. Notably, Egypt's offshore Nile Delta is an important part of the company's upstream portfolio. Operatorship of the North Al-Burg offshore concession was awarded to BP Exploration (Delta) Limited in June 2005. Another two major discoveries in the Nile Delta were made earlier by the company, namely Raven in 2003, followed by the more recent Taurus Deep discovery in 2007. Both are within the North Alexandria A concession. An inevitable merger BURDENED by heavy losses and failure to settle mounting debts, the Holding Company for Trade (HCT) was merged last week in the Holding Company for Housing and Construction (HCHC). Moreover, HCT's affiliates will be distributed among three holding companies. The decision by Prime Minister Ahmed Nazif came only two weeks after HCT's general assembly meeting discussed remarks by the Central Auditing Agency (CAA) on the company's performance and the financial bottlenecks of its affiliates. A press release by the Ministry of Investment said the CAA issued a "conservative" report for the second successive year on the company's financial statements and activity. HCT, which has 14 subsidiaries, posted LE243 million in losses during fiscal year 2006-07 due to accumulated claims and liabilities. The LE1.1 billion which the government injected into the company to settle its debts and restructure its affiliates failed to change its fortune. Eight out of the 14 affiliates made losses that amounted to LE150 million during 2006- 2007. The release stated that based on remarks made by the CAA, the company's general meeting believed it is necessary to address administrative issues, such as financial systems and internal auditing techniques. Most of HCT's affiliates suffer from an inability to meet their short-term and urgent obligations, along with downward liquidity indicators, inflated stocks, humble collection of customer accounts and accumulated loss. The affiliates are now divided among the portfolios of three holding companies according to specialty, integration and ability to bear administrative and financial burdens of restructuring and improvement. Upper Egypt Tractors, Egypt Tractors Company Irrigation Company for Public Works, Egyptian Company for Irrigation, Drainage and Construction and Ramses Company for Agricultural Projects Management will be managed by HCHC. Meanwhile, Egypt's department stores companies Sidnaui, Hanaux and Benzione are now under the umbrella of HCT. The Holding Company for Maritime and Inland Transport will include in its portfolio Misr Company for Foreign Trade, Misr Import and Export, Misr Car Trading Company, Al-Nasr Import and Export and the Commercial Company for Wood. Hadi Fahmi, former head of HCT, was appointed consultant to the minister of investment. Press reports claim that the decision came due to differences between Minister of Investment Mahmoud Mohieldin and Fahmi about the collection of yet unpaid dues of the sale of Omar Effendi last year to the Saudi Anwal Group. Al-Wafd newspaper quoted unnamed sources as saying that Fahmi insisted on asking the Saudi investor to pay LE80 million which it still owes to the Egyptian government, while Mohieldin showed reluctance in collecting the money.
