Dragon Oil has announced the acquisition of a stake in The Gulf of Suez Oil Company (GUPCO Egypt) formerly owned by BP.
The company, which is the fully owned exploration and production platform of Emirates National Oil Company (ENOC), made the move after obtaining approval from the Egyptian Ministry of Petroleum and Mineral Resources.
Under the terms and conditions of the acquisition, Dragon Oil has become the contractor with Egyptian General Petroleum Corporation (EGPC) instead of BP in all oil production and discovery concessions in the Gulf of Suez area.
The move will enhance the company's strategic production and investments in a number of regions and countries of the world such as Turkmenistan, Iraq and Afghanistan, bringing the company's daily production estimated at 150,000 barrels per day, which is considered as part of Dragon’s strategy to reach production of 300,000 barrels of oil per day by 2026.
GUPCO Egypt, currently produces 60,000 barrels per day from 11 concessions and has a sustainable production target of 75,000 barrels by 2021.
Dragon Oil plans to boost production to levels above that figure by increasing drilling and investment to maintain this level of production over the next 10 year. It says providing the best methods and practices and management of the development of these offshore fields will have a positive impact on the company's future productivity through an injection investment of US$1bn during the next five years.
This deal for Dragon Oil follows the recent successes of investment in the Egyptian oil sector. The country is considered an attractive environment for investment as Egypt and the UAE have long maintained strong relations. Also, the Egyptian market is considered promising in the field of oil and gas after issuing laws stimulating investment, along with the government's willingness to cooperate and interact with investors.