BP selling Gulf of Suez assets to Dragon Oil

June 3, 2019

Offshore staff

LONDON – BP has agreed to sell its interests in Gulf of Suez oil concessions offshore Egypt to Dragon Oil, a wholly-owned subsidiary of the Emirates National Oil Co.

Under the terms of the agreement, Dragon Oil will purchase producing and exploration concessions, including BP’s interest in the Gulf of Suez Petroleum Co. (GUPCO).

The deal, which is subject to the Egyptian Ministry of Petroleum and Mineral Resources’ approval, is expected to be completed during the second half of 2019. It is part of BP’s plan to divest more than $10 billion of assets globally over the next two years. Financial details are not being disclosed.

CEO 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…”

Hesham Mekawi, regional president, BP North Africa, added: “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 four gas projects onstream in Egypt. In February, production began from the Giza and Fayoum fields, under the second stage of the West Nile Delta development. The first stage, 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, West Nile Delta production is expected to reach up to 1.4 bcf/d, equivalent to about 20% of Egypt’s current gas production, according to BP. 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.

The company currently produces, with its partners, close to 60% of Egypt’s gas production through the joint ventures Pharaonic Petroleum Co. and Petrobel (IEOC JV) in the East Nile Delta as well as through the BP-operated West Nile Delta fields.