Refiner plays down Egypt risks

China Petroleum & Chemical Corp, or Sinopec, has played down concerns about potential risks to the value of its investment in the Apache project in Egypt.

The north African country has been in political turmoil of late.

Sinopec's clarification came in response to concerns that the value of its 33 percent stake in Apache's Egyptian company, which it bought for $3.1 billion in 2013, may have eroded massively due to local and global factors.

Apache is an independent US upstream oil and gas company with 24 contractual blocks in Egypt. Zhang Hong, head of the HSE Department of Apache Qarun Production Company, said such concerns are baseless.

"The Egyptian project is more of a long-term investment and four years is too short to draw a conclusion. The prices of oil and gas are fluctuating. Now that they have hit the bottom, we're confident our investment will recover its cost within the expected 10 years," Zhang said.

Sinopec's Apache investment was its first foray into Egypt. It was also an attempt to increase its production of oil equivalent during the peak season.

Ever since the project handover, against the challenges of falling oil price, the Apache project has seen stable oil and gas production of 350,000 barrels per day, said Shao Jingyang, general manager of the Egyptian unit of Sinopec International Petroleum Exploration and Production Company.