EGYPT – Shell, a global group of energy and petrochemical companies, 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 that the sale was conducted via its subsidiaries Shell Egypt N.V. and Shell Austria GmbH 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.

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 US$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 US$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.

Cheiron is an independent exploration and production company focusing on revitalizing and optimizing production at medium-sized mature fields. Our interests span the range of oil and gas upstream activity — from exploitation to full field development planning and operations.

From its robust base in the Egyptian mature fields region, Cheiron is actively expanding into international markets in need of its particular brand of expertise, with operations and assets in Mexico and Romania.

Cairn is one of Europe’s leading independent energy companies and has been listed on the London Stock Exchange for 30 years. Cairn has explored, discovered, developed and produced oil and gas in a variety of locations throughout the world as an operator and partner in all stages of the oil and gas lifecycle.

Cairn’s exploration activities have a geographical focus in the North Sea, North and West Africa and Latin America, underpinned by interests in production and development assets. Cairn has its headquarters in Edinburgh, Scotland supported by operational offices in London, Egypt, Mexico and Mauritania.