Dragon Oil had allocated a budget of around $500 million for acquisitions in 2019. Can you tell us more about these deals?
Yes, this was previously announced in 2018; however, during 2019, Dragon Oil closed the GUPCO deal from BP at $850 million.
From your point of view, how will GUPCO’s acquisition deal help enhance Dragon Oil’s global position and investments in other countries, including Turkmenistan, Iraq, and Afghanistan?
GUPCO’s acquisition was a good test for our capabilities, both technical and financial. GUPCO is important for Dragon Oil in order to operate in Egypt and look for more opportunities. Dragon Oil is also committed to focusing on operational excellence and feasible investment to improve production.
What is Dragon Oil’s strategy to achieve a production rate of around 300,000 barrels per day (b/d) by 2026, especially after the completion of the acquisition transaction?
Now with production from GUPCO expected at an average of 75,000 b/d, together with similar production in Turkmenistan and improved production in Iraq, Dragon Oil production will be over 150,000 b/d, which is half way from achieving the target production of 300,000 b/d
After acquiring BP’s stakes in GUPCO, how does Dragon Oil plan to develop GUPCO’s current production rate of 63,000 b/d to reach 75,000 b/d by 2021? What are the technical methods Dragon Oil will depend on to maintain this level of production?
Dragon Oil, jointly with EGPC, will increase the number of rigs, together with special focus on well intervention. Technology and innovation will be utilized through the integrated teams and the international experience in artificial intelligence and 3D seismic.
Are there any new exploration and production (E&P) activities in the East Zeit Bay concession area that you would like to share with us?
We are completing our commitment, where we drilled the first well and shot the seismic survey, and now we are looking forward to drilling the second well.
Would you say that, as Dragon Oil pushes its activities in the Gulf of Suez region, GUPCO has the potential to succeed in East Zeit Bay as the company’s primary asset in Egypt?
GUPCO represents the petroleum legacy of Egypt and has spare capacity in its surface facilities, pipeline, and storage. Any new additional fields can be connected to GUPCO, where feasible.
Based on the strong relations between Egypt and the UAE, does Dragon Oil have any other future investment plans in Egypt?
We learned about Egypt’s new legislations to stimulate more investment in oil and gas and more production of oil and gas and improve the natural economy. This is very interesting to Dragon Oil, being a 100% UAE company that can operate professionally and safely within the collaborative atmosphere between Egypt’s and the UAE’s governments.
Do you think the nature of the oil and gas industry is collaborative or competitive? And for the industry’s greater good, can such collaboration manifest through mergers and acquisitions?
The classical roots of the E&P industry are collaborative since all operations are done by service companies, vendors, and contractors engaged in production operations, drilling, maintenance, or projects engaging high-standard manufacturers. All of this is planned, supervised, and managed by the operating companies under the guidelines and approval of the host government. Such culture will continue, however, with higher agility and adaptation to the new best practices and innovative technology, so companies continue to be competitive.