U.S. oil and gas producer Apache Corp is selling a 33 percent stake in its Egypt oil and gas business for $3.1 billion to state-owned Chinese oil giant Sinopec Group, reducing its exposure in the country amid the recent political unrest.
Apache, which has been selling non-core assets globally to focus on U.S. onshore production and shore up its balance sheet, said it has also formed a global strategic partnership with Sinopec to jointly pursue upstream oil and gas projects.
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The Egypt deal would be the first step of the joint venture with Sinopec Group, parent of Sinopec Corp, Apache said in a statement.
Apache had said it was assessing the value of its Egyptian interests, which account for roughly a fifth of its global oil and gas production and 27 percent of its revenue last year.
Disappointing production and investor concern over Apache's high exposure to Egypt have pressured the company's stock. Egypt is enduring the worst internal strife in its modern history, triggered by the army's July 3 overthrow of President Mohamed Mursi.
Apache said in the statement that its Egyptian exploration and production operations "remain unaffected" by the political turmoil in the country as they are located in remote, unpopulated areas.
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Net production from Apache's Egypt operations averaged 100,000 barrels of oil and 354 million cubic feet of natural gas per day in 2012, Apache said, adding that it employs about 9,000 people in the north African country.
Apache will continue to operate its oil and gas projects in Egypt. Sinopec and other state-owned Chinese oil firms have been investing billions of dollars in energy projects around the world as part of Beijing's drive to expand its footprint in the global oil industry and beef up energy security amid surging imports.
The sale of the Egyptian assets to Sinopec International Petroleum Exploration and Production Corp - a wholly-owned unit of Sinopec Group - is subject to regulatory approvals and is expected to close during the fourth quarter, said Apache.
Last month Apache also sold its Gulf of Mexico shelf assets for $3.75 billion to private equity firm Riverstone Holdings LLC in order to focus on growth from its U.S. onshore assets.