Kuwait Energy acquires assets from Oil Search

Rick Wilkinson
OGJ Correspondent

MELBOURNE, Apr. 15 -- Oil Search Ltd., Sydney, has sold a number of its Middle East and North African division to Kuwait Energy Co. for $200 million plus working capital to enable the company to focus its attention on the Papua New Guinea LNG joint venture operated by ExxonMobil Corp.

The Egyptian assets include a 70% interest in Area A in the Eastern Desert next to the Gulf of Suez, a 49.5% interest in East Ras Qattara concession, and a 30% interest in Block 6 in Mesaha.

The Yemen assets sold include 35% of Block 15, 32.5% of Block 35, 42.33% of Block 49, 34% of Block 74, and 28.33% of Block 43 in the Hadraumat region of the country's southeast.

The transaction took place at the end of February, but completion is not expected until midyear because the deal is subject to government and joint venture partner approvals.

Peter Botten, Oil Search's managing director, said while the company had successfully built a diversified portfolio in the Middle East and North Africa, a number of the licenses were not material in the context of Oil Search's growing gas portfolio.

Botten added that the sale of these assets would provide cash and reduce near-term capital requirements, freeing up funds to go towards Oil Search's share of the proposed Papua New Guinea LNG project, which aims to establish an LNG plant near Port Moresby based on gas reserves in the central highlands fields.

Oil Search has retained some interests in the Middle East and North Africa, namely Blocks 3 and 7 in Yemen, Area 18 off Libya, and the recently acquired Tajerouine and Le Kef permits in Tunisia plus the Bina Bawi concession in Kurdistan.