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Shell to sell Western Desert assets to focus on offshore gas projects Industry source reveals that company already received approval, say the sale is a positive indicator for Egypt's attractiveness for investors
Shell Egypt said it plans to sell its current assets in the Western Desert to focus on expanding its offshore gas projects, the company said in a Sunday statement. A source in the oil sector told Daily News Egypt, that Shell has begun to exit globally from the activity exploration and production in onshore areas, to focus on and expand its work with offshore gas projects and deepwater operations. He added that Shell has offered for sale many of its concession areas around the world, including outdated and offshore, including areas in the North Sea. The source revealed that Shell has already obtained the approval of the Ministry of Petroleum to offer its concession for sale, which represents a positive picture of investment in the sector and the occurrence of many acquisitions of oil companies during the last three years. Shell Egypt has stakes in 19 oil and gas producing development leases in the Western Desert, including the Badr El-Din and Obaiyed areas, in addition to four exploration concessions, namely North East Abu El Gharadig, West Sitra, Bed 1 gas, and most recently, the West Alam El Shawish concession. "We remain committed to Egypt and see our future in supporting Egypt's energy hub vision by growing Shell's positions across offshore and natural gas value chains," Wael Sawan, Shell upstream director, said in a statement. Accordingly, the source said that sales deals that are made in the oil sector represent a positive picture of investment because it confirms that the oil market in Egypt is attractive to international companies working in the oil and gas. Shell Egypt Chairperson Khaled Kacem said the sale is subject to government approvals and expects talks with potential buyers to start in the fourth quarter of 2019. Kacem statements were echoed by the source who added that the sale comes in line with the company's plan to expand the exploration and production of gas in the marine areas, and to achieve an added value of production through the export of liquefied gas or transported through pipelines to neighbouring countries. Shell Egypt has a 33% stake in North Damietta offshore concession in a consortium with oil industry companies BP and Petronas. Shell also secured a 33% share in the North Tinah offshore Concession where BP is the operator holding the remaining 66% share. In 2014, Shell Egypt Chairperson – at the time – Jeroen Regtien told Daily News Egypt that "Shell will not apply to any tenders for research and exploration in areas other than the Western Desert". Five years later, the Ministry of Petroleum has succeeded in amending agreements, gas prices and quotas of foreign partners to benefit the state and the investor, making Egypt an attractive destination for investors.
