Houston-based Overseas Private Investment Corporation (OPIC) announced a commitment to provide $300 million in political risk insurance to Apache Corporation for a project designed to help Egypt shift the emphasis of its energy production from oil to more environmentally friendly natural gas.
OPIC’s board of directors had approved the project in April 2004.
“Apache, the largest U.S. investor in Egypt, will use the OPIC insurance to develop various onshore and offshore oil and gas concessions in Egypt,” said the bulletin. “Apache’s natural gas discoveries in the Western Desert have already played a significant role in helping Egypt to convert much of its thermal power generation capacity from oil to natural gas, and in providing the resources necessary to meet growing local energy needs as well as expanding Egypt’s hydrocarbon exports.” Overall production of crude oil is declining in the country.
“The oil and gas sector is an increasingly important part of the Egyptian economy, accounting for 8 percent of the country’s gross domestic product. Apache’s continued investment in the sector will be critical to Egypt’s ability to meet both domestic and export demand,” stated OPIC President and CEO Dr. Peter Watson at a signing ceremony at OPIC headquarters. “OPIC is pleased to support both Apache Corporation and our Egyptian partners in this important investment,” he continued.
“Since 2000, Apache has doubled its production in Egypt and has considerable running room for additional investment,” commented G. Steven Farris, Apache’s president, CEO and COO. “With the Egyptian General Petroleum Corporation as our partner and now with OPIC’s substantial support, we look forward to further developing Egypt’s considerable hydrocarbon potential.”
Dr. Watson also noted that Apache produces 14 percent of Egypt’s total oil and gas output and, according to company estimates, generates nearly $4 million a day in net revenue for the Egyptian economy.
The bulletin further noted: “OPIC was established as an agency of the U.S. government in 1971. It helps U.S. businesses invest overseas, fosters economic development in new and emerging markets, complements the private sector in managing risks associated with foreign direct investment, and supports U.S. foreign policy. Because OPIC charges market-based fees for its products, it operates on a self- sustaining basis at no net cost to taxpayers.
“OPIC’s political risk insurance and financing help U.S. businesses of all sizes invest in more than 150 emerging markets and developing nations worldwide. Over the agency’s 33-year history, OPIC has supported $164 billion worth of investments that have helped developing countries to generate more than 732,000 host-country jobs and $13 billion in host-government revenues. OPIC projects have also generated $69 billion in U.S. exports and created more than 264,000 American jobs.”
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