Shell Acquires 30% of Tharwa's Acreage in the Western Desert

Shell Egypt has signed a farm-in agreement with Tharwa Petroleum Company to acquire 30% of Tharwa's 60,000 Sq km acreage in the Western Desert as part of its active portfolio management.

Shell Egypt and Tharwa Petroleum Company signed the farm-in agreement on 20 February 2005 with respect to the Sallum, Siwa, West Ghazalat and Farafra concessions in the Western Desert. This deal gives Shell Egypt 30% equity in each of the four blocks. The partnership is comprised of Tharwa 45%, Shell 30% and Petronas 25%.

This acquisition fits with Shell's strategic plans of pursuing focused near-field exploration activities and is considered a milestone in its planned expansion of activities in Egypt. Exploration acreage in the Western Desert is highly coveted, driven mainly by discoveries made by IOCs. This is, pretty much, frontier acreage, which lies between Apache's Qasr discovery and the Libyan border.

"This is a great opportunity to forge a strategic alliance with a national oil company. It is consistent with our commitment to manage our portfolio in a way that creates maximum value to the country, partners and shareholders," said Iman Hill, chairwoman of Shell Companies in Egypt.

Under this partnership deal, Shell will offer technical expertise in the form of regional studies, subsurface expertise along with general management and process expertise.

This agreement represents the first partnership between an international and a national oil company. This strategic partnership will provide a stepping-stone for broader activities and engagement for Shell in Egypt, thereby demonstrating Shell's commitment to Egypt. Tharwa shall be the operator of these concessions under a Joint Operating Agreement.

Tharwa is the first 100% Egyptian entity established to handle oil and gas exploration, development and production inside and outside Egypt. It is backed by EGPC, Ganope, National Investment Bank and Gasco.