Emirati offers compete with Energean for BP assets in Egypt

Two Emirati companies joined the race late last week to acquire BP’s assets in Egypt, following prolonged negotiations with UK-based Energean, a source familiar with the deal at the Ministry of Petroleum told Al Manassa.

The proposed sale of a stake in BP Egypt’s assets has drawn controversy over Energean’s heavy operational focus in Israel. Headquartered in London and listed on the London Stock Exchange, the company also joined the Tel Aviv Stock Exchange in 2018.

Speaking on condition of anonymity, the source said the two Emirati firms held talks with BP, formerly British Petroleum, focusing on the new investors’ commitment to production targets across the concessions included in the deal.

He noted that Energean had come a long way in the negotiations, but the concerned parties, represented by BP, Energean, and the Egyptian Ministry of Petroleum, had not reached a final agreement before new companies entered the competition.

Although media reports previously valued the deal at about $1 billion, the source explained that BP may seek to raise the valuation above $1.2 billion while retaining its 10% stake in the Zohr field, the largest natural gas field in the Mediterranean.

The ownership structure of the Zohr field currently 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, following stake sales by Eni to its partners in recent years.

The source added that BP is conducting direct talks with the prospective buyers, particularly after financial bids came in 10% to 20% higher than the initial valuations accompanying its divestment plan.

The assets up for 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.

Last week, the same source told Al Manassa that completing the transaction remains subject to final regulatory approval from the Egyptian government, which will evaluate future operating plans, production schedules, and investment commitments to ensure domestic gas supplies are safeguarded.

According to the source, BP produces between 1.1 billion and 1.3 billion cubic feet of natural gas daily in Egypt, making it one of the country’s primary producers. The assets currently on the market yield roughly 600 million cubic feet per day, accounting for nearly 16% of Egypt’s total average domestic output of about 3.8 billion cubic feet daily.

BP has operated in Egypt for more than 60 years and has invested over $35 billion in oil and natural gas research, exploration, and production projects.