BP agrees to sell Egypt GUPCO stake to Dragon Oil

Dragon Oil, the upstream arm of ENOC, will add 70,000 barrels per day of production to its portfolio through the acquisition

Dragon Oil CEO, Ali Al Jarwan, in the company's Dubai office
Dragon Oil CEO, Ali Al Jarwan, in the company's Dubai office

Oil major BP has agreed to sell its interests in Gulf of Suez oil concessions in Egypt to Dragon Oil, the Dubai-based upstream arm of ENOC.  Dragon Oil will purchase producing and exploration concessions, including BP’s interest in the Gulf of Suez Petroleum Company (GUPCO). 

In an exclusive interview with Oil & Gas Middle East, Dragon Oil CEO Ali Al Jarwan noted that its acquisition in Egypt would add 70,000 barrels per day (bpd) of production to its portfolio, with potential to scale up to 100,000bpd.

The deal is expected to complete during the second half of 2019 and is part of BP’s plan to divest more than $10bn of assets globally over the next two years.

“Egypt is a core growth and investment region for BP," said BP Chief Executive Bob Dudley. "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. 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.”

In the past two years, four new gas projects in Egypt have begun production for BP.  In February, BP announced the start of production from the second stage of the West Nile Delta development – 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 cubic feet per day (bcf/d), equivalent to about 20% of Egypt’s current gas production. All the gas produced will be fed into the national gas grid. BP currently produces, with its partners, close to 60% of Egypt’s gas production through the joint ventures the Pharaonic Petroleum Company (PhPC) and Petrobel (IEOC JV) in the East Nile Delta as well as through BP’s operated West Nile Delta fields.

WATCH: Dragon Oil CEO comments on Egypt acquisition

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