BP assets up for sale represent 16% of Egypt’s gas output

The BP assets in Egypt targeted for acquisition by UK-based company Energean produce about 600 million cubic feet of gas daily, representing about 16% of average domestic production, according to a source familiar with the negotiations.

The deal has sparked controversy due to the concentration of Energean’s activities in Israel, where it supplies approximately 40% of Israeli gas demand.

Headquartered in London and listed on the London Stock Exchange, Energean, which has also been listed on the Tel Aviv Stock Exchange since 2018, seeks through the potential deal to strengthen its presence in the Egyptian gas market and expand its regional asset portfolio.

While media reports indicated that the value of the deal is about $1 billion, the source explained that BP, formerly known as British Petroleum, may move to increase the valuation to more than $1.2 billion, while retaining its 10% stake in the Zohr field, the largest natural gas field in the Mediterranean.

The current ownership structure of the Zohr field stands at 50% for Italian operator Eni, 30% for Russia’s Rosneft, 10% for Britain’s BP, and 10% for the UAE’s Mubadala Energy, after Eni sold stakes in the concession to its current partners over recent years.

The assets under negotiation include gas production areas within the Temsah concession in the Mediterranean, alongside BP’s stakes in West Nile Delta projects, which comprise a group of gas fields located within the North Alexandria and West Mediterranean Deepwater concessions. BP operates the West Nile Delta facilities with an 82.75% stake, while Harbour Energy holds the remaining 17.25% share.

The source told Al Manassa, speaking on condition of anonymity, that a new round of negotiations is scheduled to take place in Cairo early next week in an attempt to reach a final agreement. Finalizing the transaction remains contingent on obtaining approvals from the Egyptian government, which will review future operating plans as well as production and investment programs for the assets under negotiation to maintain production rates and secure gas supplies for the domestic market.

BP’s total production in Egypt ranges between 1.1 and 1.3 billion cubic feet of gas daily, making the company one of the primary gas producers in the Egyptian market.