BP Plc said June 3 it had agreed to sell its interests in the Gulf of Suez oil concessions in Egypt to Dubai-based Dragon Oil Plc for an undisclosed sum.
Under the terms of the agreement, Dragon Oil will purchase producing and exploration concessions, including BP's interest in the Gulf of Suez Petroleum Co. (GUPCO). Dragon Oil is a wholly-owned subsidiary of the Emirates National Oil Co. (ENOC).
Reuters reported last month that London-based BP was nearing the sale of the Egyptian assets to Dragon Oil for over $600 million, citing industry and banking sources.
The deal, which is subject to the Egyptian Ministry of Petroleum and Mineral Resources' approval, is expected to complete during the second half of 2019, BP said in a statement.
It is part of BP's plan to divest over $10 billion over the next two years, it said, but the deal's financial details were not disclosed.
The sale comes as BP focuses its operations on Egypt's vast offshore gas reserves. In February, BP launched the Giza/Fayoum field in the West Nile Delta offshore area which is expected to produce around 60,000 barrels of oil equivalent per day.
BP's total net production in Egypt reached 49,000 barrels per day of oil and gas liquids and 878 million cubic feet per day of gas in 2018, according to its 2018 annual report.
"Egypt is a core growth and investment region for BP," CEO Bob Dudley said in a statement.
"In the past four years we have invested around $12 billion in Egypt—more than anywhere else in our portfolio—and we plan another $3 billion investment over the next two years," Dudley said.
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The company also said it expects to generate substantial free cash flow in 2018, allowing it to initiate a dividend in the first-quarter of 2019.