Shell Sheds Egypt Onshore Assets Days After Permian Exit
Energy supermajor Shell has completed the sale of their upstream assets in Egypt’s Western Desert to a consortium made up of subsidiaries of Cheiron Petroleum and Cairn Energy.
Shell said on Friday that the sale was conducted via its subsidiaries Shell Egypt N.V. and Shell Austria GmbH for a base consideration of $646 million and additional payments of up to $280 million between 2021 and 2024, contingent on the oil price and the results of further exploration.
Initially, the sale was announced on March 9, 2021, and the transaction’s effective date is January 1, 2020. Completion follows the receipt of all necessary regulatory approvals.
With this transaction, Shell is refocusing its business in Egypt on our existing infrastructure position in the West Delta Deep Marine, the Harmattan Deep Project, and exploration acreage in the new seven blocks in the Nile Delta, West Mediterranean, and the Red Sea.
As for midstream, Shell still is a part of the Egyptian LNG joint-venture, and in downstream it is present through Shell Lubricants Egypt. The company has been active in Egypt for a massive 110 years and remains a leading player in the country.
This deal follows the sale of its Permian business to ConocoPhillips for $9.5 billion in cash. Shell’s Permian business includes ownership in approximately 225,000 net acres with current production of around 175,000 barrels equivalent per day.
The majority of the company’s Midland-based Permian employees, and many Houston-based employees, will be offered employment by ConocoPhillips.
Shell noted that proceeds from the transaction will be used to fund $7 billion in additional shareholder distributions, with the remainder used for further strengthening of the balance sheet. The company said the distributions will be in addition to its shareholder distributions in the range of 20-30 percent of cash flow from operations.
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