The Overseas Private Investment Corporation (Opic) has made a commitment to provide US$300mn in political risk insurance to a US company that is helping Egypt shift the emphasis of its energy production from oil to more environmentally-friendly natural gas. Opic’s board of directors approved the project in April 2004.

Houston-based Apache Corporation, the largest US investor in Egypt, will use the Opic insurance to develop various oil and gas concessions in Egypt. 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. Egypt’s production of crude oil from maturing oil fields is declining, while large discoveries of gas have emerged in the Western Desert and Nile Delta.

“The oil and gas sector is an increasingly important part of the Egyptian economy, accounting for eight percent of the country’s GDP. Apache’s continued investment in the sector will be critical to Egypt’s ability to meet both domestic and export demand,” Opic president and CEO Peter Watson said at a signing ceremony at Opic headquarters. “Opic is pleased to support both Apache Corporation and our Egyptian partners in this important investment.”

“Since 2000, Apache has doubled its production in Egypt and has considerable running room for additional investment,” says Steven Farris, Apache’s president, chief executive officer and chief operating officer. “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.”

Watson noted that Apache produces 14% of Egypt’s total oil and gas output and, according to company estimates, generates nearly US$4mn a day in net revenue for the Egyptian economy.