EGYPT – Shell Egypt, a subsidiary of Royal Dutch Shell Plc, and one of its affiliates is set to divest their upstream assets in Egypt’s Western Desert to subsidiaries of Cheiron Petroleum Corporation and Cairn Energy PLC for up to US$926 million.
The company clarified in a statement Tuesday that the sales and purchase agreement (SPA) worth US$646 million with additional payments of up to US$280 million between 2021 and 2024, contingent on the oil price and the results of further exploration.
The deal is expected to complete in the second half of 2021, it added noting that the transaction is subject to government and regulatory approvals.
“The deal will help Egypt maximize the potential of its onshore assets through new investment, helping secure energy and revenue for years to come.”Wael Sawan – Director, Shell’s Upstream
“Today’s announcement is consistent with Shell’s efforts to shift our Upstream portfolio to one that is more focused, resilient and competitive” Shell’s Upstream Director Wael Sawan said.
“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 maximize the potential of its onshore assets through new investment, helping secure energy and revenue for years to come.”
According to Shell Egypt, the package of assets consists of Shell Egypt’s interest in 13 onshore concessions and the company’s share in the Badr El-Din Petroleum Company (BAPETCO).
“We are proud of our history as one of the first oil and gas companies in the Western Desert, and as a partner in BAPETCO since its formation almost four decades ago,” Shell’s Country Chair for Egypt Khaled Kacem, said.
“BAPETCO and the Western Desert concessions continue to provide revenue, jobs and energy for the country, while Egypt’s Modernization Programme will ensure that this will be the case for many years to come.
“I would like to pay tribute to the staff, stakeholders, partners and authorities who have contributed to the success of this key milestone and towards a deal completion in the near future.”
Shell has been working in Egypt since 1911 in excavation and drilling for oil, production, promoting, and the distribution of gas and petroleum derivatives.
Liked this article? Subscribe to DealStreet Africa News, our regular email newsletter with the latest news, deals and insights from Africa’s business, economy and more. SUBSCRIBE HERE