PHOTO
Shell Exploration & Production B.V., a subsidiary of Royal Dutch Shell plc. has signed farm out agreements (FOAs) with state-owned QatarEnergy, under which QatarEnergy will acquire 17 percent stake in each of Shell-operated Block 3 and Block 4 in the Egyptian Red Sea.
The FOAs, contracts which allow a project participant to add new parties to the project by selling a percentage stake in the venture, are subject to government and regulatory approvals, without prejudice to pre-emption rights, Shell Egypt said in a statement on Monday.
This follows an earlier dilution of Blocks 3 and 4 to BHP Petroleum (Egypt) Ltd., which is also subject to government and regulatory approvals.
Shell will remain the operator in both blocks, it said. Following the FOA, Qatar Energy will hold 17 percent in Block 3, with Shell holding 43 percent. BHP and Egypt's Tharwa Petroleum will hold 30 percent and 10 percent respectively.
In Block 4, Qatar Energy will hold 17 percent, with Shell holding 21 percent, Abu Dhabi’s oil and gas company Mubadala Petroleum with 27 percent. BHP and Tharwa will have 25 percent and 10 percent respectively.
Khaled Kacem, Shell’s Vice President & Country Chair for Egypt, said, “Bringing such reliable partners into the project will enable us to leverage our joint expertise as we progress the opportunity. It is also worth highlighting that we were able to attract new market entrants thanks to the favourable investment climate in Egypt."
Last week, a consortium consisting of Qatar Energy and ExxonMobil signed an agreement with Cyprus for energy exploration and production sharing in Block 5 in the southeast of the island. Under the agreement, Qatar Energy will own a 40 percent stake in Block 5 while ExxonMobil will own 60 percent and be the operator in the area, Reuters reported citing Qatar News Agency.
In January 2021, Abu Dhabi’s oil and gas company Mubadala Petroleum signed a concession agreement for the Shell-operated Block 4 located in Egypt's Red Sea region with a minimum investment of $326 million. The block, owned by the South Valley Egyptian Petroleum Holding Co. (Ganope), was awarded by the Government of Egypt in the 2019 Red Sea Licensing Round.
(Writing by Brinda Darasha; editing by Seban Scaria)
Disclaimer: This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Read our full disclaimer policy here.
© ZAWYA 2021
