Apache Corporation has announced the completion of its previously disclosed sale of a one-third minority participation in its Egypt oil and gas business to Sinopec International Petroleum Exploration and Production Corporation.
After customary closing adjustments, Apache said that it received US$2.95 billion in cash. The company said that it would continue to operate the Egypt upstream oil and gas business.
Apache holds 24 contractual blocks in Egypt, mainly located in the country's Western Desert region. Its operations including exploration are not thought to be affected by current political tensions in Egypt, Sinopec said in a related statement.
"We welcome Sinopec as our new partner in Egypt; together, we will continue to deliver the tremendous hydrocarbon resources in the Western Desert at attractive rates of return," said G. Steven Farris, Apache's chairman and chief executive officer. "We also look forward to working together in other parts of the world.
"With this transaction, Apache has completed $7 billion in asset sales in the process of rebalancing our portfolio toward assets with predictable growth rates and attractive rates of return," Farris said.
The transaction will allow Sinopec to increase its production by 130,000 barrels of oil equivalent per day during the peak season. The transaction marks Sinopec’s first entrance to Egypt’s oil and gas market, an experience which the Chinese oil major hopes will further enhance its overseas oil and gas exploration experience and capabilities.
Fu Chengyu, chairman of Sinopec said: “Sinopec is extremely delighted to enter into this global strategic partnership with Apache Corporation. Sinopec’s technical expertise is in a position to complement Apache’s 20-year operational experience in Egypt. With both parties utilising their own advantages, the partnership will further add value to Egypt’s assets and achieve a win-win cooperation.”