BP, Egypt and Sunken Cities

As BP sponsors Sunken Cities at the British Museum, its links with Egypt come into the spotlight

  • BP has huge investments in Egypt and is partnering with the repressive Sisi regime
  • The current military government put down local opposition to a BP project, which is now going ahead
  • Egypt’s own cities are sinking: Egypt is one of the world’s five most vulnerable countries to climate change, but BP continues to pump out greenhouse gas emissions
Residents of Idku march in opposition to the expansion of BP's operations. Photo: Mika Minio-Paluello
Residents of Idku march in opposition to the expansion of BP’s operations. Photo: Mika Minio-Paluello

Egypt’s cities are sinking but BP and the Egyptian government keep making deals

Egypt is one of the five most vulnerable countries in the world to climate change, with two of its four most populated cities – Alexandria and Port Said – in danger of sinking due to sea-level rise in the near future. Yet the Egyptian government and BP keep doing deals that will increase greenhouse gas emissions. Egypt could see 30 percent of the Nile Delta – home to half its citizens – become submerged in just the next 15 years. The Nile Delta is also where BP’s operations are focused.

Egypt and BP clearly both see the Sunken Cities exhibition as an extension of their long-standing business partnership, and a way of improving both of their less-than-gleaming reputations internationally. BP’s press release for Sunken Cities includes this quote, from Nasser Kamel, Egyptian Ambassador to the UK:

As well as looking for partners to invest in the Egyptian economy, Egypt is always searching for partners to help in exploring its heritage and treasures which are still hidden under its lands, and waters. This exhibition shows that despite what we know of its tremendous history and culture, Egypt still has a lot more to offer tothe world and we thank our partners in the UK, such as BP, for working with us in utilizing our resources to develop our economy and through such an exhibition unraveling our history as well. I invite the people of Britain to visit this exhibition to get a glimpse of what Egypt has to offer, and come to Egypt to live that experience.

 

BP’s business operations in Egypt 

BP is the largest foreign investor in Egypt, where it has operated for 50 years. The company currently produces almost 15% of Egypt’s oil and close to 30% of its gas, and is in the process of dramatically expanding its fossil fuel exploration and production. Egypt was one of only four countries highlighted in BP’s most recent annual report as the location of ‘new potential resources‘ the oil giant gained access to in 2015. BP is enthusiastically taking advantage of what it calls ‘the new phase of Egypt’s hydrocarbon industry and the development of a world-scale gas business in the offshore Nile Delta’. This began in 2008 when it went into business with the Egyptian government through a partnership called the Pharaonic Petroleum Company. On its website, BP claims that this joint venture ‘is designed to be an efficient and effective vehicle for our gas production growth plans in this area.’

BP’s complicity in repression in Egypt

BP’s long involvement in Egypt has included political manipulation and support for the repression of dissent. The company was a staunch supporter of the brutal Mubarak regime before the revolution. In 2012, BP was sponsoring a business lobby organisation that enthusiastically welcomed the use of executions and force to crack down on protest.

BP has spent much of the last five years trying to seal a major deal to extract gas offshore of North Alexandria. The deal was first announced under Mubarak in July 2010, for $9 billion. Following the revolution, new President Morsi met BP CEO Bob Dudley in September 2012 and announced the same project, then inflated to $11 billion.

However, BP was soon forced to put the flagship project on hold after residents in Idku mobilised against the plan to build a mega-gas plant next to their homes including sub-sea pipelines, offshore platforms and a new gas plant on the beach of this primarily fishing community.

They blocked roads, held popular street assemblies and occupied the building site. After long delays, the local resistance forced BP to concede. The company instead relocated to Burg Mighazil, a village in the neighbouring governate, where BP made an alliance with the Muslim Brotherhood – then running Egypt’s government. But once again, popular opposition put BP on the back foot and stopped construction.

In 2014, former military leader Abdel Fattah El-Sisi became President and BP seized the opportunity to restart drilling and construction – this time cutting a deal worth $12 billion – the largest foreign direct investment Egypt has ever seen. CEO Bob Dudley again went to Cairo to meet with new PM Ibrahim Mahlab, and celebrate renewed co-operation.

Abdel Fattah El-Sisi. Photo: Wikimedia
Abdel Fattah El-Sisi. Photo: Wikimedia

As part of the clampdown on public criticism under President Sisi, Egypt’s strict anti-protest law threatens multi-year prison terms for street protests, with leftists, liberals and Islamists all receiving long jail sentences. With opposition silenced, BP’s way was cleared, and the company signed the final agreement for the project to go ahead in 2015.

Each time the North Alexandria deal was renegotiated, BP managed to squeeze better terms out of the Egyptian government – meaning fewer benefits for the economy and the general population. It also benefitted greatly from Sisi’s new Investment Law, which removed legal oversight over corrupt deals.

The deal is being financed by a partnership between BP and Russian oligarch Mikhail Fridman, and means the company is once again working with Lord Brown, its former BP CEO, who is executive chairman of L1 energy, Fridman’s oil and gas company.

Most recently, BP signed a brand new deal with Egypt in early November 2015. Bob Dudley and dictator Sisi met in London during Sisi’s recent visit to seal the deal on the Atoll discovery, a large deepwater field 6400m beneath the surface of the East Mediterranean Sea, estimated to hold 1.5 trillion cubic feet of gas, announced in March 2015.

One of BP’s directors is Sir John Sawers, former British Ambassador to Egypt and chief of MI6 from 2009 to 2014.

Resident march against expansion of BP's operations in Idku. Photo: Mika Minio Paluello
Resident march against expansion of BP’s operations in Idku. Photo: Mika Minio Paluello

Egypt’s vulnerability to climate change:

Egypt is one of the five most vulnerable countries in the world to rising water levels. Its shores are at risk of sinking, while its water security and food security are under threat.

  • By 2020, Egypt could lose more than 15% of its most fertile agricultural land in the Delta region, due to sea level rise and land salinisation.
  • The Nile Delta is home to half of Egypt’s 80-million-plus population, including two of its four most populated cities, Alexandria and Port Said.
  • Climate change is causing sea-level rises and a severe loss of sediment in the Nile Delta. Combined, this could see 30 percentof the Delta submerged in the next 15 years.
  • A one-half meter rise in sea level would force 1.5 million people to evacuate from Alexandria, Egypt’s second largest city. Almost 200,000 jobs would be lost
  • The salinity of coastal water is rising dangerously, posing a threat to Egypt’s agricultural sector, which makes up 29 percent of jobs and nearly 15 percent of national gross domestic product

 


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