Royal Dutch Shell has completed the sale of its upstream assets in Egypt’s Western Desert to a consortium of independent E&P operators focused on revitalizing mature oil and gas fields, Cheiron Petroleum Corporation and Cairn Energy, both UK-based.
Having received final government and regulatory approvals completing the sale, Shell said it will focus its Egyptian business on the offshore, including the West Delta Deep Marine (WDDM), the Harmattan Deep Project, and exploration acreage in seven new blocks in the Nile Delta, West Mediterranean, and the Red Sea, according to a 24 September news release.
Shell’s midstream focus will remain on its Egyptian LNG joint venture; downstream the company still retains Shell Lubricants Egypt.
Shell subsidiaries Shell Egypt NV and its affiliate, Shell Austria GmbH, sold off the 13 onshore concessions in the Western Desert as well as Shell’s share in the Badr El-Din Petroleum Company (Bapetco) to a consortium of Cheiron Petroleum and Cairn Energy for a base consideration of $646 million and additional payments of up to $280 million between 2021 and 2024, contingent on the oil price and the results of further exploration.
Shell announced the sale on 9 March 2021 with a 1 January 2020 effective date when the economic interest moved to the sellers.
Cherion Petroleum, with assets in Egypt, Mexico, and Romania, and its strategic partner Cairn Energy, which operates in Egypt, Mexico, Israel, Suriname, Mauritania, and UK, will each hold 50% interests in the consortium that has taken over Shell’s assets.
In its own news release, Cherion noted that the acquisition comprises more than 20 producing fields with infrastructure; a statement by Carin noted that the portfolio is “gas-weighted” and in a region where demand for gas is high.
Cheiron will operate the producing and development concessions while Cairn (through its subsidiary Capricorn Egypt) operates three of the exploration blocks. Field activities will continue to be managed by the Bapetco, Cheiron said in its release.
Cairn's website identifies the producing fields, split over four distinct areas, each with different characteristics and geographies:
- The Obaiyed Area contains Egypt’s largest onshore gas field and includes the Obaiyed Concession and other producing concessions
- Badr El-Din holdings comprise five producing concessions, both oil and gas
- North East Abu Gharadig (NEAG) comprises the concession covering the NEAG Tiba area and the NEAG Extension area
- Alam El Shawish West concession area
Cairn said in its news release that it has appointed Eleanor Rowley as managing director, Egypt. She joins Cairn from TotalEnergies where she was vice president exploration for the Middle East, Caspian, North Africa, and Southern Europe.
