On September 24, Royal Dutch Shell PLC said that its subsidiaries have completed the sale of upstream assets in Egypt’s Western Desert to subsidiaries of Cheiron Petroleum Corp and Cairn Energy PLC.
Cheiron subsidiaries acquired 50% of the assets, with the remaining 50% acquired by Capricorn Egypt, a wholly-owned subsidiary of Cairn, from Shell Egypt NV and Shell Austria GmbH.
Contingent on the oil price and the results of further exploration, a transaction was agreed for a base consideration of US$646 million and additional payments of up to US$280 million between 2021 and 2024.
Following this transaction, Shell is refocusing its business in Egypt on its existing infrastructure position in the West Delta Deep Marine, the Harmattan Deep project, and exploration acreage in the new seven blocks in the Nile Delta, Midstream and Downstream, the company said.
The gas-weighted portfolio, in a region with strong demand growth, in the meantime, offers low-cost production, near-term development, owned infrastructure, and significant exploration potential, Cairn said. Chief Executive Simon Thomson added:
“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.”