London — BP is nearing the sale of its stake in a major Egyptian oil and gas company to Dubai-based Dragon Oil for over $600 million, industry and banking sources said.
The sale, which is expected to complete in the coming weeks, would mark the end of BP’s 50-year-old partnership in the Gulf of Suez Petroleum Company (GUPCO) as the London-based company focuses on developing Egypt’s large offshore gas reserves.
Dragon Oil, a subsidiary of Dubai’s Emirates National Oil Company (ENOC), has said it plans to expand its international operations and boost its production to 300,000 barrels of oil equivalent per day by 2025.
GUPCO produces over 70,000 barrels per day of oil and 400 million cubic feet per day of gas, the sources said.
A BP spokesman declined to comment. The Egyptian Petroleum Ministry and the Egyptian General Petroleum Corporation (EGPC) had no immediate comment. ENOC could not be reached for comment.
The GUPCO sale has received the initial approval of Egypt’s Petroleum Ministry after it had objected to an agreement BP had reached last year with North African-focused oil and gas company SDX Energy to buy the asset, one of the sources said.
Dragon Oil’s main asset is Turkmenistan’s Cheleken field, where it produces close to 90,000 bpd. In Egypt, it has a 100% interest in the East Zeit Bay block.
The cash raised from the sale will help BP towards its goal of selling more than $5 billion of assets following the $10.5 billion acquisition of BHP’s onshore oil and gas assets in the United States last year.
BP’s total net production in Egypt reached 49,000 bpd of oil and gas liquids and 878 million cubic feet per day of gas in 2018, according to its annual report.
In February, BP launched the Giza/Fayoum field in the West Nile Delta offshore area which is expected to produce around 60,000 boe/d.