Apache Corp. has just announced that it will sell a third of its oil and gas business in Eygpt to China's Sinopec for $3.1 billion in cash. The companies admitted that the sale is just part of a new global exploration and production partnership.
It is another sale in a series deals that Apache has agreed to this year, all part of a multibillion dollar rebalancing of its asset portfolio, that has also included; the sale of oil & gas producing properties in Alberta to Ember Resources Ltd. for $214 million, and its Gulf of Mexico Shelf operations to Fieldwood Energy LLC for $3.75 billion.
If the deal is closed before the end of the fourth quarter, as expected, then Apache will have easily achieved the goal of $4 billion in asset sales it had set itself for 2013.
G. Steven Farris, chief executive officer of Apache, said on Thursday that the partnership with Sinopec will combine the Chinese company's technical expertise with Apache's 20 years of experience working in Egypt.
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"Sinopec is an ideal partner for us, and we look forward to the growth and value generation ahead for both companies through the expansion of our collaboration to other projects," he said.
In 2012 Apache claim that their average daily production from Egypt was 100,000 barrels of crude oil and 354 million cubic feet of natural gas. Although it is likely that these figures will have fallen considerably due to recent unrest and violence across the country following the ousting of President Mohammed Morsi at the beginning of July.
Sinopec hope that the fact that Apache's assets are located out in the Western Desert, and away from the centres of political unrest, the recent violence will have little impact on daily operations, but the deal was made with focus on the long-term future, rather than current circumstances. Bloomberg calculates that the company should be able to increase its annual production by nine percent with this purchase.
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com More