Osama Kamal, Former Minister of Petroleum, has told Daily News Egypt that BP’s North Alexandria deal includes a revolving letter of credit worth the contractor’s share value in the gas that is renewed every three months.
He explained that the clause ensures the state’s right in the gas production, and prevents manipulation or delays from foreign partners. He noted that for the first time a clause is specified requiring the Egyptian General Petroleum Corporation (EGPC) to open a revolving letter of credit to ensure partners’ rights.
Kamal stressed that the most prominent factors in the deal are the fines to be imposed in case of delays, after the six months grace period that starts from the production date.
The North Alexandria concession is part of the the West Nile Delta (WND) project that BP signed with EGPC during the March 2015 economic conference. The deal is worth $12b.