Shell inks deal to sell onshore upstream assets in Egypt for $646M

Royal Dutch Shell PLC's Shell Egypt NV and its affiliate Shell Austria GmbH agreed to divest onshore upstream assets in Egypt's Western Desert to a consortium composed of subsidiaries of Cairn Energy PLC and Cheiron Petroleum Corp. for a base consideration of $646 million.

The deal covers Shell Egypt's operated onshore exploration assets, including the South East Horus, West El Fayum and South Abu Sennan concessions; a 50% non-operator stake in Badr El-Din Petroleum Co.; and producing assets operated by Badr El-Din, according to a March 9 news release.

Badr El-Din's producing assets comprise a 100% interest in Obaiyed, North Umbaraka, Badr el Din fields, Sitra, North Alam El Shawish, and North Matruh; a 52% stake in North East Abu Gharadig; and a 40% interest in Alam El Shawish.

The deal includes additional payments of up to $280 million between 2021 and 2024, contingent on oil prices and results of further exploration. It is scheduled to close in the second half of the year.

"Today's announcement is consistent with Shell's efforts to shift our Upstream portfolio to one that is more focused, resilient and competitive," said Wael Sawan, Shell's upstream director. "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."

In the West Mediterranean, Shell Egypt is the operator of the North Marina and North Cleopatra concessions in the Herodotus Basin, through its unit BG Delta Ltd., and holds interests in the North Ras Kanais concession. In the Red Sea, Shell Exploration & Production (93) BV is the operator of Blocks 4 and 3. In the West Nile Delta, BG Delta is the operator of Blocks 4 and 6.