Shell Egypt and one of its affiliates have signed an agreement with a consortium to sell the former’s upstream assets in Egypt’s Western Desert for a base consideration of $646m.
Further additional payments of up to $280m will be made between 2021 and 2024, contingent on the oil price and the results of further exploration.
The consortium is made up of subsidiaries under the US’ Chevron Petroleum Corporation and the UK’s Cairn Energy PLC.
The transaction is subject to government and regulatory approvals, and is expected to complete in the second half (H2) of 2021.
The package of assets consists of Shell Egypt’s interests in 13 onshore concessions, and the company’s share in Badr El-Din Petroleum Company (BAPETCO).
Wael Sawan, Shell’s Upstream Director, said, “Today’s announcement is consistent with Shell’s efforts to shift our upstream portfolio to one that is more focused, resilient and competitive.”
He added, “The deal will deliver value to Shell and to Egypt, and 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.”
Sawan also said that it will help Egypt maximise the potential of its onshore assets through new investments, helping secure energy and revenue for years to come.
Shell has been working in Egypt since 1911 in excavation and drilling for oil, production, promoting, and the distribution of gas and petroleum derivatives.