Oil company Shell has decided to divest its stake in an offshore block in Palestine.
The company, through its affiliate BG Great Britain Limited, has reached an agreement with Palestine Investment Fund (PIF) to divest its entire interest and operatorship in the Gaza Marine license. Gaza Marine license was Shell’s only project in Palestine.
“This deal is consistent with Shell’s strategy to high-grade and simplify our portfolio. It helps to concentrate our upstream footprint where we can be most competitive and build our world-class investment case,” Shell said.
Government and partner consents have been obtained. The equity has been transferred to PIF at the signing of the Sale and Purchase. Shell’s interest in Gaza Marine was 90 percent.
Shell had gotten hold of the asset in Palestine through its acquisition of UK’s BG Group in 2016.
BG Group had taken operatorship an exploration license, awarded in 1999, covering the entire marine area offshore the Gaza Strip.
BG Group drilled two successful wells in 2000 (Gaza Marine-1 and Gaza Marine-2) and resources, according to the document, were estimated to be around 1 tcf. This one one of the first discoveries in the gas-prone Levant basin, that would later unearth giant gas fields such as Tamar, Zohr, and Leviathan.
Palestinian then leader Yasir Arafat at the time said: “It’s a gift from God to us, to our people, to our children…This will provide a solid foundation for our economy, for establishing an independent state with holy Jerusalem as its capital.”
In 2001, a technical review recommended a sub-sea development and pipeline to an onshore processing terminal. In 2002, an outline Development Plan was approved by the Palestinian Authority.
However, the field has never produced gas as in 2007, BG Group withdrew from negotiations with the government of Israel for the sale of gas from the Gaza Marine field to Israel.
In 2008, BG Group closed its office in Israel but maintained contact with the Palestinian Authority and the government of Israel to investigate options for Gaza Marine development.
The field has never been put in production as, according to reports, Israel feared the money from gas produced would go to Hamas. Subsequent discoveries of large gas fields – Tamar (producing), and Leviathan (under development) – offshore Israel, diminished Israel’s need to import gas.
Offshore Energy Today Staff