UAE’s Dragon Oil to invest EGP 1 bn in newly acquired Gulf of Suez assets
INVESTMENT WATCH- UAE’s Dragon Oil to invest EGP 1 bn in newly acquired Gulf of Suez assets: Emirates National Oil Company’s (ENOC) subsidiary Dragon Oil is planning to invest up to EGP 1 bn over the next five years after acquiring BP’s stake in Egypt’s Gulf of Suez oil concessions, according to a cabinet statement. The investments will be directed towards increasing drilling activity to ramp up production in the concessions. Dragon Oil is planning to surpass the current 75k bbl/d production target and plans to maintain the higher output levels for 10 years.
The Oil Ministry has also granted regulatory approval for the company to acquire BP’s stake in the concessions, making Dragon Oil the Egyptian General Petroleum Corporation’s (EGPC) partner contractor in the Gulf of Suez Petroleum Company (GUPCO), a JV that was set up by BP and EGPC to undertake exploration and production operations in the area. The value of the transaction hasn’t been disclosed, but Reuters suggested earlier this year that it was in the region of USD 600 mn.
Background: BP’s GUPCO exit is part of the company’s strategy to clear off more than USD 10 bn in global assets over two years. The company will instead focus its work in Egypt on natural gas. Last February, it began natgas production from its Giza and Fayoum fields, part of the second phase of the three-stage West Nile Delta concession development project. The final phase of the project is expected to kick into gear later this year when the Raven field goes online.