Apache Corporation and Sinopec International Petroleum Exploration and Production Corporation (SIPC) have launched a global strategic partnership to pursue joint upstream oil and gas projects.
As the first step in this partnership, Apache will receive $3.1 billion in cash, in exchange for Sinopec gaining a 33 percent minority participation in Apache’s Egypt oil and gas business. Apache will continue to operate its Egypt upstream oil and gas business.
The partnership will contribute additional 130,000 barrels of oil equivalent per day (about 6.50 million of oil equivalent annually) of production to SIPC. Through this partnership, Sinopec is able to enter the upstream oil and gas sector of Egypt for the first time and expand its international upstream portfolio.
“By combining the complementary strengths of Sinopec and Apache, this alliance will create added value for Egyptian operations, bringing win-win results for both partners,” said SIPC in a statement. “In the meanwhile, this partnership will further build up Sinopec’s capability and experience in promoting overseas reserves and production.”
G. Steven Farris, chairman and chief executive officer of Apache, said: “We are pleased to launch a global partnership with Sinopec, and to welcome them into our business in Egypt. Their technical expertise complements our 20 years of experience operating in Egypt and creates an alliance that will continue to explore and deliver the tremendous hydrocarbon resources in the Western Desert. 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.”
Net production from Apache’s Egypt operations averaged 100,000 barrels of oil and 354 million cubic feet (MMcf) of natural gas per day in 2012. Gross production during the period averaged 213,000 barrels of oil and 900 MMcf of gas per day. Apache’s exploration and production operations, which are located in remote, unpopulated areas, remain unaffected by political events in the region.
