The transaction is part of BP’s plan to divest over £7.91bn of assets across the world in the next two years
BP has signed a deal to offload its stakes across certain mature oil assets in the Gulf of Suez, offshore Egypt, to UAE-based Dragon Oil, a subsidiary of Emirates National Oil Company (ENOC), for an undisclosed price.
As per the deal terms, Dragon Oil will buy producing and exploration concessions, including BP’s stake in the Gulf of Suez Petroleum Company (GUPCO). Currently, Dragon Oil holds 100% stake in the East Zeit Bay block contained in the southern Gulf of Suez region.
For BP, the transaction is part of its strategy to sell more than $10bn (£7.91bn) of assets globally in the next two years.
The sale of the Egyptian mature oil assets is likely to be wrapped up during the second half of 2019 depending on approval from the Egyptian Ministry of Petroleum and Mineral Resources.
BP North Africa regional president Hesham Mekawi said: “We continue to bring on new developments and deliver important gas supplies for the country. We remain on track to triple our 2016 net production from Egypt by 2020.
“As we grow our business here, we also keep our portfolio under review. We believe Dragon Oil is well-placed to operate these mature assets, delivering further value for Egypt.”
Recent activities of BP in Egypt
In Egypt, BP had commenced production at four new gas projects in the last two years. Earlier this year, the oil and gas giant began production from the offshore Giza and Fayoum gas fields as part of the second stage of its West Nile Delta development.
In the first stage of the West Nile Delta project, the company developed the Taurus and Libra fields, which have been producing since 2017. Under the third stage development, the Raven field is expected to be brought into production later this year.
BP chief executive Bob Dudley said: “Egypt is a core growth and investment region for BP. In the past four years we have invested around $12 billion in Egypt – more than anywhere else in our portfolio – and we plan another $3 billion investment over the next two years.
“We look forward to continuing to broaden our business here, working closely with the government of Egypt as we develop the country’s abundant resources.”