Shell offers Rosetta concession for sale
The government owes Shell $1.3bn for their share of the gas field, says source.
Royal Dutch Shell has offered the Rosetta concession in Rashid for sale to any foreign company.
A source close to the company told Daily News Egypt that Shell decided not to carry out any development operations in Rosetta. “Development will be expensive with almost no economic feasibility, considering the price of gas produced there,” he explained.
He said the Rosetta field currently produces 40 million cubic feet of gas per day and will stop producing by July as the natural decay of productivity is not offset by development.
He pointed out that British Petroleum (BP) acquired the Rosetta gas treatment plant in Rashid from Shell for $128m. BP received the plant in April and began preparations to link it to Fayoum and Giza fields.
The source said that the maximum capacity of the Rosetta gas treatment plant is 425 million cubic feet of gas per day, of which 420 million cubic feet will come from Fayoum and Giza fields by 2019.
He added that Royal Dutch Shell moved the current supply extracted at the Rosetta field to the Burullus gas treatment plant after selling the Rosetta gas treatment plant to BP.
The source explained that Shell has reduced its investments for the current fiscal year in Burullus and Rashid concession areas to cover only operation and maintenance costs. He added that in the fiscal year (FY) 2016/2017 Shell plans on investing $158.9m, down from $222m in FY 2015/2016.
He said the company allocated about $96.7m to operate the Burullus field and $38m for periodical maintenance.
He added that Shell allocated $22.7m for operational costs of the Rosetta field and $1.4m for field maintenance without new developments.
He noted that production of Burullus and Rashid fields naturally declines by 10m cubic feet of gas per day.
Daily News Egypt had previously revealed that the Ministry of Petroleum owes Shell $1.3bn, for their share of the gas produced from the Rashid and Burullus fields.
The government collects roughly $50m a month in dues owed to Shell for the Burullus and Rashid fields, however; they have been unable to pay the company due to the ongoing foreign currency shortage.
(Source: Daily News Egypt)