Naftogaz fails to find advisor to assess appropriateness of selling Egypt assets

Ukraine’s joint-stock company Naftogaz Ukrainy has annulled the second tender to provide investment banking services related to Naftogaz upstream assets in Egypt and search for potential buyers, as less than two bids were submitted.

According to a report in the ProZorro e-procurement system, only E&Y LLC took part in the tender, while at the first tender France’s Lazard Frères showed its interest in the tender.

The expected cost of the deal is around $1.5 million. The services were to be delivered before December 31, 2018.

The company planned to select the winner of the tender taking into account the price and the number of finalized M&A deals in the oil and gas sector in European countries, the Middle East and North Africa in the past five years.

Naftogaz Board Chairman Andriy Kobolev said at the end of 2016 that the holding is mulling how to sell its assets in Egypt, as this business does not bring large profit due to oil price drops.

Naftogaz through its subsidiary Zakordonnaftogaz explores and operates two oil and gas blocks in the Eastern Desert of Egypt – South Wadi El Mahareeth and Wadi El Mahareeth. The work on these deposits, the projected resources of which exceed 360 million tonnes of oil, is carried out on the basis of concession agreements signed on February 7, 2012 between Zakordonnaftogaz on behalf of Naftogaz and the government of the Arab Republic of Egypt and GANOPE state oil company (Ganoub El -Wadi Holding Petroleum Company).

The duration of the concession agreements is 28 years.

Naftogaz Ukrainy in 2015 increased production of oil and condensate in Egypt by 20.7% compared to 2014, to 318,000 tonnes (2.33 million barrels). Commercial gas production was 192 million cubic meters, which is 4.8 times more than in 2014.

Source: Interfax