Kuwait Energy divests stake in Egypt concession
Kuwait Energy sells 22% share in Abu Sennan concession to Beach Energy
Independent oil and gas exploration and production company, Kuwait Energy Company announced that it has reduced its equity stake in the Abu Sennan concession in Egypt from 72% to 50% through the sale of a 22% stake to the Australian company, Beach Energy Limited. With the sale now concluded, Kuwait Energy continues to hold the majority interest and operatorship in the concession.
As a result of this transaction, ownership of the Abu Sennan concession is now shared between Kuwait Energy Egypt (50%), Beach Petroleum (Egypt) Pty Ltd (22%) and Dover Investments Limited (28%).
The partial divestment will enable Kuwait Energy’s expenditure to be more aligned with its target ratio of 80:20 between producing/developing assets and exploration assets. It will also reduce Kuwait Energy’s share of exploration expenditure commitment.
In a statement, Kuwait Energy said that its portfolio management ensures the optimum mix of exploration, development and production assets and the maintenance of appropriate levels of risk in individual assets. Central to this strategy is the flexibility to reduce stakes and/or permit farm-ins, on a case-by-case basis, to maintain an appropriate balance.
The transaction was initially announced in August 2010, with the signing of a Sale and Purchase Agreement (SPA), and was finalised this week after completing the standard governmental approval processes. Kuwait Energy has also signed an SPA with Beach Energy Limited for the sale of a 15% stake in the non-operated Mesaha exploration concession, also in Egypt, reducing its stake in Mesaha to 15%. The Mesaha transaction is currently passing through the governmental approval process and is expected to conclude in the coming months.
The Abu Sennan concession is located approximately 300km west of Cairo in the Abu Gharadig Basin. The Mesaha concession is located in the south of Egypt, close to the Sudan border.
In December Kuwait Energy sold 20% of its share in another Egyptian concession in Burg El Arab, to Canadian oil company East West Petroleum Corporation.