Egypt’s upstream dealmaking picks up as BP courts Energean and Genel outbids DNO for Capricorn

BP is pushing ahead with its USD 700 mn, four-well drilling program in Egypt as it negotiates the sale of roughly USD 1 bn of its local assets to Med-focused Energean. The wells fall on both sides of that dividing line: the first is in a field Energean is lined up to buy, and two of the next three go to Arcius Energy, the joint venture BP is keeping. EVP for Production and Operations Gordon Birrell walked Petroleum Minister Karim Badawi through the program on Thursday, the ministry said in a statement.

On the selling side: Fayoum-4 is already producing in the West Nile Delta, two years ahead of schedule, pumping around 80 mmcf / d to the national grid, according to the ministry. The package Energean is eyeing covers BP’s West Nile Delta stakes (held with London-listed Harbour Energy) and its 50% contractor interest in the Temsah concession, Reuters reports. That’s where Italian partner Eni made the c. 2 tcf Denise West discovery earlier this year.

On the keeping side: After Fayoum-4, the rig moved to the Gharab exploration well. Next, it will drill two deepwater exploration wells back-to-back for Arcius, BP’s 51-49 joint venture with Abu Dhabi’s XRG, the ministry said. Arcius also holds BP’s interest in Zohr, the Eastern Mediterranean’s largest gas field at around 30 tcf, which BP plans to keep.

Why it matters: The drilling plan shows where BP intends to stay in Egypt once the sale closes. Its new deepwater exploration is going to the JV that holds Zohr, while the assets headed to Energean get a producing well on the way out.

Energean leads the race for the rest: Energean entered exclusive talks with BP in late August, and the Middle East Economic Survey (MEES) reported it has four weeks to firm up its offer. That puts it ahead of UAE-based Dragon Oil, US private equity firm Carlyle, and London-based Artemis Energy, the bidders we reported were circling in July.

What’s next: Energean needs to turn its indicative offer into a binding bid. Separately, the Temsah partners and the Egyptian state are aiming for a final investment decision on Denise West within the next few months, Eni said in late August.

Upstream M&A is heating up

MEANWHILE- Kurdistan-focused Genel Energy raised its offer for Edinburgh-based Capricorn Energy to USD 436 mn, outbidding Norwegian producer DNO and regaining Capricorn’s board recommendation, according to a statement (pdf). That works out to USD 5.74 per share, about 10% above the USD 396 mn (pdf) DNO put forward earlier this month.

A takeover tug-of-war: Genel first agreed to buy Capricorn for USD 360 mn in July. Capricorn’s board has since pulled its backing for DNO, and investors holding about 39% of Capricorn’s share capital have committed to support Genel, the statement reads.

The assets: The company holds a 50% non-operated interest across the eight concessions it merged into a single license across the Western Desert, including the Badr El Din Merged Concession, North East Abu Gharadig, and Alam El Shawish West. State-linked operator BAPETCo runs the fields — Egyptian independent Cheiron is Capricorn’s 50% partner. The portfolio produced roughly 20k barrels of oil equivalent per day in 2025, generating USD 81 mn in net income.

Cooler weather reopens Idku

Shell and Petronas will resume exporting LNG from the Idku liquefaction plant in October, Asharq Business reports, citing an unnamed Shell official. The companies are finalizing the export schedule, including the number of cargoes and volumes. Each cargo is expected to carry about 150k cbm of LNG.

REMEMBER- Shell and Petronas got the green light to export two LNG cargoes during October and November last year. By March 2026, the state pressed pause on LNG shipments flowing out of Idku. Shell and Petronas usually receive some 350 mmcf / d of LNG for export from the facility — the last shipment sailed back in late February. Shell and Petronas jointly hold 71% of Idku, while the EGPC and Egas together own 24%, and France’s Engie controls the remaining 5%.

Why it matters: The country is importing gas to cover a domestic shortfall while keeping some exports flowing to preserve commercial relationships linked to its LNG infrastructure. “Importing and exporting — this would be the end game for Egypt,” VP and Country Chair of Shell Egypt Dalia El Gabry said at an AmCham gathering back in April.

By the numbers: Annual gas exports fell from around 5.6 bn cbm in 2023 to 1.4 bn cbm in 2024 and 1.1 bn cbm in 2025 as declining domestic production forced more gas into the local market. However, exports dropped from 906 mn cbm in 1Q 2024 to 90 mn cbm in 1Q 2025, before recovering to 377 mn cbm in 1Q 2026 — a fourfold rebound.