A consortium made up of subsidiaries of Cheiron Petroleum and Cairn Energy has signed an agreement with Shell Egypt and one of its affiliates to acquire Shell’s upstream assets in Western Desert, Egypt for $646m.
The deal also includes additional payments of up to $280m between 2021 and 2024, subject to oil price and the results of further exploration.
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Under the agreement, the consortium will acquire a package of assets comprising Shell Egypt’s stakes in 13 onshore concessions, as well as a 50% non-operator interest in Badr El-Din Petroleum Company (BAPETCO).
BAPETCO has a 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 owns a 40% stake in Alam El Shawish block.
Cairn said that the acquisition forms part of its strategy to grow, diversify, and extend its production base.
The firm said in a statement: “The portfolio offers low cost production, near-term development and exploration potential, provides immediate operating cashflow contribution and adjusts our overall hydrocarbon split towards gas.”
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By GlobalDataShell upstream director Wael Sawan said that the deal aligns with Shell’s efforts to shift its Upstream portfolio to one that is more focused, resilient, and competitive.
Sawan added: “The deal will deliver value to Shell and to Egypt. It will enable Shell to concentrate on its offshore exploration and integrated value chain in Egypt, including seven new blocks in the Nile Delta, West Mediterranean, and Red Sea. It will help Egypt maximise the potential of its onshore assets through new investment, helping secure energy and revenue for years to come.”
Subject to government and regulatory approvals, the deal is slated to close in the second half of this year.
