BP to divest mature oil assets in Egypt to Dragon Oil
BP is to sell its interests in mature Gulf of Suez oil production and exploration concessions in Egypt, including its stake in the Gulf of Suez Petroleum Company (GUPCO), to Dubai-based Dragon Oil. Dragon Oil is a wholly-owned subsidiary of the Emirates National Oil Company (ENOC).
The deal, which is subject to the Egyptian Ministry of Petroleum and Mineral Resources’ approval, is part of BP’s plan to divest more than $10bn of assets globally over the next two years. Financial details have not been disclosed.
Despite the sale of the mature assets, Bob Dudley, BP Chief Executive, says that Egypt remains ‘a core growth and investment region’ for BP. ‘In the past four years we have invested around $12bn in Egypt – more than anywhere else in our portfolio – and we plan another $3bn investment over the next two years.’
Hesham Mekawi, Regional President, BP North Africa, adds: ‘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.'
In the past two years, BP has brought onstream four new gas projects in Egypt. In February 2019, the second stage of the West Nile Delta development came onstream – which includes five gas fields across the North Alexandria and West Mediterranean Deepwater offshore concession blocks – producing from the Giza and Fayoum fields. The first stage, producing from the Taurus and Libra fields, started up in 2017. The final stage, developing the Raven field, is expected to begin production late this year.
When fully onstream in 2019, combined West Nile Delta production is expected to reach up to 1.4bn cf/d, equivalent to about 20% of Egypt’s current gas production. All the gas produced will be fed into the national gas grid.
The BP-operated Atoll Phase One gas project began production in early 2018. The Eni-operated Zohr gas field, in which BP is a partner, began production late 2017.