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Egypt’s offshore segment poised for growth

Carla Sertin Carla Sertin: Feb 12, 2020

At the close of Egypt’s Red Sea bidding round, it is clear that international oil companies see opportunity in the country, and its growth is just beginning to swell. Egypt awarded Shell, Mubadala, and Chevron exploration rights in the Red Sea. Chevron and Shell each won one block, and a third block was awarded to Shell and Mubadala.

The three concessions cover a combined 10,000sqkm, and will require a minimum investment of $326mn. The licensing round started in February, following Egypt’s gas boom in multiple regions. The Red Sea bidding round included ten exploration blocks, each approximately 3,000sqkm. Saudi Arabia has also discovered large amounts of gas in the Red Sea, and is planning to conduct feasibility studies. It will use its autonomous subsea seismic acquisition fleet for its Red Sea exploration efforts, which are expected to intensify in the next two years.

Meanwhile, Shell Egypt has announced that it will sell its onshore assets in the Western Desert as it focuses on offshore exploration and its integrated gas business in the country. “Shell is proud to have worked in Egypt for over 100 years,” said Wael Sawan, Shell’s upstream director. “We remain committed to Egypt and see our future in supporting the Government’s energy hub vision by growing Shell positions across the offshore and LNG value chain. This is where we can best leverage our expertise, deliver the strongest added value to Egypt, and optimise our portfolio to ensure the company delivers a world class investment case.”

Khaled Kacem, Shell Egypt country chair, said: “Shell companies are progressing with new offshore activities, including our West Delta Deep Marine (WDDM) Phase 9B project, which involves eight new development wells, and exploration in WDDM, for which a 2nd offshore rig has been recently mobilised, that will be followed up with exploration in Rosetta as well as the recently awarded Blocks 4 and 6”

“We anticipate the start of active engagement with potential buyers in Q4 2019. During the divestment process we remain committed to ensure continued safe and reliable operations, and will keep our stakeholders regularly informed.”

While some assets are being divested, international oil companies appear to be swarming to Egypt’s vastly untapped potential offshore and onshore, having seen the success of the giant Zohr gas field.


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