BP invested $14bn in Egypt over 5 years, despite widespread corruption

BP’s CEO Bernard Looney has said it has invested $14 billion into Egypt over the past five years.

In total, the company has invested $35 billion into Egypt making it one of the largest foreign investors in the country. As analysts have pointed out, this means it more or less controls the energy supply in the country producing 50 per cent of Egypt’s natural gas consumption.

In 2015, BP secured a $12 billion investment deal for a gas project in the West Nile Delta under which it would sell 100 per cent of the gas produced from two offshore blocks in Egypt, despite the fact that the traditional foreign investors share is 20-30 per cent.

Former Egyptian MP Hatem Azzam has previously estimated that BP’s deal cost the Egyptian people some $32 billion.

The following year British investments in Egypt hit $30 billion, making it the country’s highest foreign investor.

Since his rise to power the Egyptian president has promised to revive the economy, even asking Egyptians to forego their freedoms in exchange for a healthy economy.

Yet under his rule the poverty rate has risen in the country – now over one third of Egyptians live below the poverty line, leading ordinary citizens to ask where these multi-billion investments are going.

Egyptian whistleblower Mohamed Ali last year revealed corruption within the inner circles of the regime, detailing how the president and his wife built opulent palaces whilst the ordinary population struggle to buy basic commodities as austerity measures are rolled out across the country under the terms of an IMF loan.

Floods in Egypt last October highlighted the lack of investment in the country’s infrastructure where the heavy rain flooded the streets and social media users complained about ineffective drainage systems in the city.

Transparency International’s 2019 Corruption Perceptions Index revealed that Egypt’s corruption score is 35/100 which puts it at the lower end of the index, indicating a significant problem with public sector corruption.

Rights organisations have constantly raised the issue of conditioning foreign investment on human rights which would be an effective leverage.

In January, when Egyptian President Abdel Fattah Al-Sisi visited the UK as lead speaker at the African investment conference, protesters again called on the government to raise the issue of human rights with its major ally.

Instead, following Al-Sisi’s visit, the UK’s ambassador announced £6.5 billion ($8.5 billion) worth of commercial deals had been signed between Egypt and Britain.

Source: Memo