Egypt has reportedly told BP it would not approve the proposed sale of some of the British energy giant’s oil and gas interests to Israeli-linked Energean, raising doubts over a potential deal worth around $1 billion.
Two people familiar with the talks told Egyptian independent outlet Mada Masr that the message was delivered during a meeting in Cairo last Thursday between Petroleum Minister Karim Badawi and BP executive Gordon Birrell.
One of the sources said Egyptian officials cited “national security concerns” and raised questions over whether Energean had the technical capacity to develop the assets, particularly those requiring deepwater drilling.
Neither the Egyptian government nor BP has publicly announced a decision to reject the proposed sale.
BP and Energean are in exclusive talks over interests that include BP’s stake in the offshore West Nile Delta development and its 50 percent contractor interest in the Temsah concession, Reuters reported in August.
No final transaction has been announced. BP would retain its Egyptian interests held through Arcius, its joint venture with the UAE’s XRG, including a stake in the giant Zohr gas field.
Any transfer of BP’s interests would require Egyptian government approval. Mada Masr reported that even if BP and Energean reach an agreement, the proposed transfer would have to be submitted to Egyptian authorities.
The government’s reported warning to BP therefore falls short of a formal rejection of a completed transaction, as neither a final agreement nor an official refusal has been publicly announced.
Concerns over Energean
Energean already operates in Egypt, but its largest producing assets are offshore Israel. Mada Masr reported that concerns over the company’s links to Israel formed part of the backdrop to the Egyptian government’s reported position.
The prospective sale also comes at a sensitive time for Egypt’s gas sector, as Cairo seeks greater investment to boost declining domestic production and reduce its reliance on energy imports.
Egyptian lawmakers have raised questions over whether a new owner would have the financial and technical capacity to meet drilling and development commitments attached to the assets.
At Temsah, BP and Italy’s Eni are working with the Egyptian state towards an investment decision on the Denise West discovery, which Eni estimates contains around two trillion cubic feet of gas.
A Petroleum Ministry account of Thursday’s meeting made no mention of the proposed sale.
Instead, the ministry said BP was continuing a four-well drilling programme backed by $700 million in investment and stressed that planned work across its Egyptian concessions should proceed.
The first well in the programme began supplying gas to Egypt’s national grid in September, according to the ministry.
BP has operated in Egypt for more than six decades. Reports suggest its gas production in the country fell to around 518 million cubic feet per day last year, a decline of about 40 percent from 2024.
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