United Energy Group has agreed to acquire Kuwait Energy (KE), an independent oil and gas company with activities across the MENA region, for $651m.
In this regard, the Chinese oil & gas exploration and production company will buy 100% of the issued share capital of Kuwait Energy through a scheme of arrangement.
Founded in 2005, Kuwait Energy is said to have a diversified portfolio of oil and gas assets. The company is engaged in exploration, appraisal, development and production of hydrocarbons across Iraq, Egypt, Yemen and Oman.
As of 12 September 2018, Kuwait Energy’s portfolio has nine oil and gas assets across the four countries, out of which it is an operator in six of them.
In late April, the company and its partners officially inaugurated Siba Gas Plant in south of Iraq. Kuwait Energy is the operator of the Siba Gas Plant with a stake of 30%.
Its stake in the Iraqi gas plant is the result of a 20-year gas development and production service contract it had been awarded in 2011 for the Siba Field, which is estimated to have 1.1 trillion cubic feet of reserves.
Through the acquisition of Kuwait Energy, the Hong Kong-based United Energy Group expects to transform itself into a strong medium-sized international independent oil and gas firm having a diversified portfolio of high quality assets.
According to the Chinese company, the production base and long reserve life of the MENA-focused oil and gas company, is highly complementary to its own existing portfolio. In addition to that, the transaction is also expected to give it a sustainable development profile for the next 20 years.
United Energy Group, in a statement, said: “The Company will also leverage its strong financial capabilities to enhance the development potential of KE’s portfolio. The Acquisition will significantly improve the profile of the Company and also further expand its development potential.”
The deal to buy Kuwait Energy follows the Chinese company’s acquisition of two subsidiaries of OMV Group – OMV Maurice Energy (OMEL) and OMV (Pakistan) Exploration Gesellschaft (OPAK) in late June for about $185.8m.