China's United Buys Kuwait Energy

China’s United Energy Group will acquire Middle East and North Africa-focused independent Kuwait Energy for up to US$651mn, it said September 24.

The Chinese firm said it will turn the company into a medium-sized international independent oil and gas entity.

Kuwait Energy (KE) has assets in Egypt, Iraq, Oman and Yemen. Its 2017 net production was 26,819 barrels of oil equivalent per day (boe/d), most of which (14,900 boe/d) from Egypt. Its audited 2P net reserves at year-end 2016 were 810mn boe, mostly in Iraq particularly block 9. Six months ago it confirmed that talks about its possible merger with UK-based Soco International were terminated by mutual agreement.  KE is registered in Jersey, headquartered in Bahrain, but maintains its regional operational hub in Kuwait with other offices in Basra, Baghdad and Cairo.

Hong Kong-listed United Energy has an upstream business presence in South Asia, chiefly in Pakistan where it produced 62,327 boe/d net in 2017 - split roughly in revenues, four-fifths gas and one-fifth oil - but it also provides oilfield support and renewable energy services; it has offices in China and Pakistan. Its net 2017 profit was HK$1,315.8mn (US$168mn), up 37% year on year.

“The transaction is a significant milestone in implementing the company’s medium and long-term growth strategy of becoming an independent international oil and gas company,” said United Energy Group adding that the production base and long reserve life of Kuwait Energy are highly complementary to its existing portfolio and provides a sustainable development profile for the next two decades.

It will be United Energy’s third acquisition in 2018. It acquired OMV’s upstream business in Pakistan for $192mn in March, and Asia Resources Oil in April - the latter also has assets in Pakistan.  

Kuwait Energy's four exploration and production assets in Egypt (Map credit: Kuwait Energy)