Shell completes sale of Desert assets in Egypt to Cheiron Petroleum and Cairn Energy

The subsidiaries of royal dutch shell PLC Shell Egypt N.V. and Shell Austria GmbH completes sale of Desert assets in Egypt to Cheiron Petroleum and Cairn Energy, for a base consideration of US$ 646 million and additional payments of up to US$ 280 million between 2021 and 2024.

Having received final government and regulatory approvals completing the sale, The oil company said it will focus its business in Egypt on the offshore, including the the Harmattan Deep Project, West Delta Deep Marine (WDDM) 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 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.

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.

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.

The Chief Executive of Cairn, Simon Thomson, said:

“The addition of the Western Desert assets to our portfolio is an important first step in expanding and diversifying our producing asset base, alongside offering significant exploration potential.

We look forward to working alongside our partners to deliver the attractive growth opportunities the assets provide.

I would like to thank the Government of Egypt and the Minister of Petroleum and Mineral Resources for their approval of the transaction.”