Apache signs agreement with Sinopec to establish oil and gas partnership

US-based oil and gas company Apache has established a global strategic partnership with Sinopec International Petroleum Exploration and Production to pursue joint upstream oil and gas projects.

As part of the deal Apache will receive $3.1bn cash in exchange for Sinopec’s acquisition of 33% interest to participate in the company’s Egypt oil and gas business, while Apache will continue its operations in the Egypt upstream oil and gas business.

Apache has operating joint ventures in Egypt with Egyptian General Petroleum, which includes Khalda Petroleum and Qarun Petroleum.

The company produced about 100,000 barrels of oil and 354 million cubic ft (MMcf) of natural gas per day in 2012 from its operations in Egypt.

The gross production of the company is about 213,000 barrels of oil and 900 MMcf of gas per day during the same period.

In the second quarter of 2013, the company received about 55% of production from onshore assets of North America and 15% from Egypt.

Apache chairman and CEO G. Steven Farris said that Sinopec’s technical expertise will complement the company’s 20 years of operating experience in Egypt, and help 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," Farris added.

The transaction, which is expected to be completed in the fourth quarter, is subject to customary governmental approvals.

Sinopec also holds oil and gas operations in the US, Canada, UK, Australia and Argentina.

---

Image: Sinopec headquarters in Chaoyang district, Beijing, China. Photo courtesy of WhisperToMe.