Royal Dutch Shell, through subsidiaries Shell Egypt and Shell Austria, completed the sale of upstream assets in Egypt’s Western Desert to Cheiron Petroleum Corporation and Cairn Energy, the three companies announced in separate statements on Friday.
Shell Egypt N.V. and Shell Austria GmbH have completed the sale to a consortium made up of subsidiaries of Cheiron and Cairn for a base consideration of $646 million and additional payments of $280 million between 2021 and 2024, contingent on the oil price and the results of further exploration.
Capricorn Egypt, a wholly owned subsidiary of Cairn, acquired 50 percent of the assets, with the remaining 50 percent acquired by Cheiron subsidiaries, Cairn said in a statement.
The acquisition value, which is subject to completion adjustments, is $323 million net to Cairn, with additional contingent consideration of up to a maximum of $140 million over four years net to Cairn if certain requirements are met, it added.
The sale, announced on March 9 and the transaction’s effective date was 1 January 2020, has now received all necessary regulatory approvals, Shell said in its statement.
“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).” Shell statement read.
Shell has been active in Egypt for 110 years and remains a leading player there.
Egypt’s attractive investment climate
“Cheiron is delighted to have completed this transaction and would like to thank the Government of Egypt for its continuing efforts to maintain an attractive investment climate for the energy sector and for approving Cheiron and Cairn’s entry into the concessions.” David Thomas, chief executive of Cheiron, said in a company statement.
