KEY POINTS
- Energean is in exclusive talks to acquire selected BP oil and gas assets in Egypt in a deal potentially worth about $1 billion.
- The proposed acquisition includes BP’s interests in West Nile Delta and its 50 per cent working interest in the Temsah concession.
- The deal would strengthen Energean’s presence in Egypt while supporting BP’s strategy to simplify its portfolio and reduce costs.
Energean is in exclusive negotiations to acquire some of BP’s upstream oil and gas assets in Egypt in a deal that could be worth about $1 billion, according to sources familiar with the transaction.
The proposed acquisition would give the London-listed gas producer a larger presence in Egypt’s energy sector as it seeks to expand beyond its core operations in the Eastern Mediterranean.
The talks involve BP’s interests in the producing offshore West Nile Delta assets, which it owns jointly with Harbour Energy, as well as BP’s 50 per cent contractor working interest in the Temsah concession in the eastern Mediterranean.
The deal is part of BP’s broader strategy to streamline its portfolio, reduce debt and lower costs while concentrating on selected strategic assets.
BP has been a major investor in Egypt’s oil and gas industry, investing more than $35 billion in the country over six decades.
However, its Egyptian gas production has declined significantly in recent years.
The company produced about 518 million cubic feet of natural gas per day in Egypt last year, representing a decline of roughly 40 per cent from 2024 and almost 60 per cent from 2023.
The decline comes as BP reviews its global portfolio and seeks to improve its financial position through asset sales and other cost-cutting measures.
Under the proposed transaction, BP would retain its Egyptian interests held through Arcius, a joint venture with UAE-based XRG. Those retained assets include interests in the giant Zohr gas field.
Energean expands its Egyptian footprint
For Energean, the potential acquisition would significantly strengthen its position in Egypt and support its strategy of expanding into new markets.
The company has previously expressed interest in growing its operations beyond its flagship offshore gas fields in Israel, where production has been repeatedly disrupted by regional conflict.
Egypt and West Africa have emerged as key areas of interest for Energean as it looks to diversify its asset base and increase its production.
The proposed acquisition would also provide Energean with exposure to established producing fields rather than relying solely on new exploration and development projects.
The Temsah assets could provide additional upside for the buyer, particularly following a major gas discovery announced by Eni earlier this year.
Eni, which co-owns the Temsah concession, announced the discovery of an estimated two trillion cubic feet of natural gas after drilling the Denise West well offshore Egypt.
Eni, BP and the Egyptian state are now working towards a final investment decision on the development of the discovery, which is expected to be considered in the coming months.
If completed, the acquisition could therefore give Energean access not only to existing production but also to potential future gas resources.
Energean is not the only company that showed interest in BP’s Egyptian assets.
Reuters reported in July that Dragon Oil, Carlyle Group, Energean and Artemis Energy were among the companies expected to bid for BP’s interests in the West Nile Delta natural gas development.
The emergence of multiple potential buyers highlights the continuing attractiveness of Egypt’s upstream oil and gas sector, despite declining production from some mature fields.
BP and Energean declined to comment on the latest negotiations.
The transaction remains subject to the completion of negotiations and other conditions, meaning the final value and scope of the deal could still change.
