Cairn Energy and Cheiron Petroleum have agreed to acquire Royal Dutch Shell’s onshore upstream interests in the Western Desert, Egypt in a deal worth up to US$926m (£666m).
Capricorn Egypt, a fully-owned subsidiary of Cairn Energy, will acquire 50% of the assets, while the remaining 50% will be acquired by Egypt-based Cheiron Petroleum. The consideration is made up of a base amount of US$646m and contingent payments of up to US$280m. The contingent payments will be made by the buyers between 2021 and 2024 based on the oil price and the results of further exploration.
As part of the deal, Cairn Energy and Cheiron Petroleum will acquire Shell Egypt’s interest across 13 onshore concessions. The onshore blocks to be acquired hold production, development and exploration assets.
The deal also includes Shell Egypt’s stake in Badr El-Din Petroleum Company (BAPETCO), the company’s 50:50 joint venture with the Egyptian General Petroleum Corporation (EGPC). BAPETCO handles the development and production of Shell’s assets in the Western Dessert.
Through the deal, Cairn Energy and Cheiron Petroleum add an estimated working interest production in 2021 of 33,000-38,000 barrels of oil equivalent per day (boepd). The consortium also gains working interest in 2P reserves of 113 million barrels of oil equivalent (mmboe), as of 31 December 2020.
The deal will be subject to receipt of government and regulatory approvals, and is likely to close in the latter half of this year.
For more information please visit Shell’s website.