Shell to sell Egyptian onshore assets to focus on offshore
Oil major Shell has revealed plans to market its current onshore upstream assets in Egypt’s Western Desert to fully concentrate on growing its Egyptian offshore exploration and integrated gas business. According to Wood Mackenzie, this plan is Shell’s attempt to high-grade its portfolio.
Shell revealed its plans for Egyptian business on Sunday, October 20, 2019.
Khaled Kacem, Shell Egypt Country Chair, said: “Shell companies are progressing with new offshore activities, including our West Delta Deep Marine (WDDM) Phase 9B project, which involves eight new development wells, and exploration in WDDM, for which a 2nd offshore rig has been recently mobilized, that will be followed up with exploration in Rosetta as well as the recently awarded Blocks 4 and 6.”
“We are looking for a capable buyer that will bring new investment and growth into the Western Desert and build on our successful partnership with the Egyptian General Petroleum Corporation. Any sale is contingent on finding an appropriate buyer, commercial negotiations and required approvals. We anticipate the start of active engagement with potential buyers in Q4 2019. During the divestment process we remain committed to ensure continued safe and reliable operations, and will keep our stakeholders regularly informed.”
Commenting after Shell announced it is putting its Western Desert assets up for sale, Toushar Chakrabarty, a research analyst on Wood Mackenzie’s North Africa upstream team, said: “We value the assets for sale at $775 million (NVP 10, January 2020), mainly amongst the Badr El Din and North Alam El Shawish developments.
“Shell’s portfolio in the Western Desert is centred around five key areas, with an average production of about 110,000 barrels of oil equivalent per day in 2019. A drilling campaign is underway, but is only expected to mitigate decline on mature fields.
“However, the assets retain upside and have good access to infrastructure, which could interest companies with brownfield expertise.”
He added: “Shell is trying to high-grade its portfolio by focusing on exploration opportunities, and its flagship offshore assets.”
Offshore Energy Today Staff
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