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Shell appoints Citi for $1 billion sale of Egypt Western Desert assets

Shell
Posted: November 17, 2019 at 12:55 am   /   by   /   comments (0)

Royal Dutch Shell has appointed investment bank Citi to run the sale of its onshore Egyptian oil and gas assets which could fetch around $1 billion, sources close to the process said.

The sale process is expected to be officially launched at the end of November, the sources said.

Shell said last month it plans to sell its onshore upstream assets in the Western Desert to focus on expanding its Egyptian offshore gas exploration.

The Western Desert portfolio includes stakes in 19 oil and gas leases of which Shell’s working interest included production of around 100,000 barrels of oil equivalent per day last year, one of the sources said.

Shell declined to comment. Citi also declined to comment.

Egypt’s oil and gas sector has seen a rapid expansion in recent years after the discovery of vast offshore gas reserves has drawn major investments from international companies including Eni and BP.

At the same time, Egypt’s aging oil and gas assets have changed hands. BP earlier this year sold its decades-old stake in the Gulf of Suez Petroleum Company (GUPCO) to Dubai-based Dragon Oil Ltd.

Shell’s Big Strategy Shift In Egypt

Oil supermajor Royal Dutch Shell has appointed investment bank Citi to run the $1 billion (£781.5m) sale of its oil and gas assets in Egypt’s Western Desert.

Sources told Reuters that the sale should be officially launched at the end of the month.

Shell announced plans for the sale, which includes a portfolio of 19 oil and gas leases with production of 100,000 barrels of oil per day, in October.

The company said that it was getting rid of the onshore assets so it could focus instead on developing its offshore footprint in the country.

Khaled Kacem, Shell Egypt country chair, said: “Shell companies are progressing with new offshore activities, including our West Delta deep marine phase 9b project, which involves eight new development wells, and exploration, for which a 2nd offshore rig has been mobilized. 

“This will be followed up with exploration in Rosetta as well as the recently awarded Blocks 4 and 6.”

Wael Sawan, Shell Upstream Director, said: “Shell is proud to have worked in Egypt for over 100 years. We remain committed to Egypt and see our future in supporting the Government’s energy hub vision by growing Shell positions across the offshore and LNG value chain. 

“This is where we can best leverage our expertise, deliver the strongest added value to Egypt, and optimize our portfolio to ensure the company delivers a world-class investment case.”

In the last year, Egypt’s offshore exploratory sector has exploded due to the discovery of two huge reserves at Zohr and Nour. 

In October Italian oil and gas giant Eni also discovered a substantial field at Sidri, which is initially expected to hold up to 200m barrels of oil. 

The same month, UAE oil company Dragon said that it had replaced BP as the partner of state-owned Egyptian General Petroleum Corporation, saying it would invest $1 billion over the next five years.

Shell and Citi both declined to comment.

(Sources: Reuters & OilPrice)

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