Shell Egypt N.V. and Shell Austria GmbH, subsidiaries of Royal Dutch Shell, have completed the sale of their upstream assets in Egypt’s Western Desert to a consortium made up of subsidiaries of Cheiron Petroleum Corporation 50% and Cairn Energy PLC 50% for a base consideration of US$ 646 million and additional payments of up to US$ 280 million between 2021 and 2024, contingent on the oil price and the results of further exploration.
The acquisition value, which is subject to completion adjustments, is US$323 million net each JV partner, with additional contingent consideration of up to a maximum of US$140 million over four years net to Cairn if certain requirements are met.
The sale was announced on 9 March 2021 and the transaction’s effective date is 1 January 2020. Completion follows 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 (WDDM), the Harmattan Deep Project and Exploration acreage in the new seven blocks in the Nile Delta, West Mediterranean and the Red Sea; in Midstream through our Egyptian LNG (ELNG) joint-venture; and in Downstream through Shell Lubricants Egypt (SLE).
Simon Thomson, Chief Executive of Cairn said:
“The addition of the Western Desert assets to our portfolio is an important first step in expanding and diversifying our producing asset base, alongside offering significant exploration potential. We look forward to working alongside our partners to deliver the attractive growth opportunities the assets provide. I would like to thank the Government of Egypt and the Minister of Petroleum and Mineral Resources for their approval of the transaction.”