Royal Dutch Shell has divested its onshore upstream interests in the Western Desert, Egypt to Cairn Energy and Cheiron Petroleum for $646m.
The deal, which was signed in March 2021, also includes additional payments of up to $280m between 2021 and 2024, subject to oil price and the results of further exploration.
The sale included Shell Egypt’s interest across 13 onshore concessions, as well as its stake in Badr El-Din Petroleum Company (BAPETCO), the company’s 50:50 joint venture with the Egyptian General Petroleum Corporation (EGPC).
BAPETCO owns 100% interest in Obaiyed, North Umbaraka, Badr el Din (BED) fields, Sitra, North Alam El Shawish, and North Matruh, as well as a 52% interest in North East Abu Gharadig field. It also holds a 40% stake in Alam El Shawish block.
Cheiron will serve as the operator of the producing and development concessions while Cairn will operate three of the exploration blocks. Bapetco Joint Operating Company will continue to manage field activities.
Cheiron CEO David Thomas said: “Cheiron is delighted to have completed this transaction and would like to thank the Government of Egypt for its continuing efforts to maintain an attractive investment climate for the energy sector and for approving Cheiron and Cairn’s entry into the concessions.
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“We have an aggressive work program planned and, in the very short term, will be significantly increasing the pace of development and exploration drilling across the concessions to rapidly boost the oil and gas production rates.”
Previously, Shell said the transaction would allow it to concentrate on its offshore exploration and integrated value chain in Egypt.