An offer to buy Shell Egypt Assets from A consortium of Cairn, Pharos
Shell looking for a capable buyer that will bring new investment and growth into the Western Desert and build a successful partnership with the Egyptian General Petroleum Corporation.
A consortium of Cairn Energy Plc, Pharos Energy Plc, and Egypt’s Cheiron Petroleum has proceeded to a second round of bidding for Royal Dutch Shell Plc’s onshore assets in the African country, in a deal that could value the business at as much as $1 billion, people familiar with the matter said.
Shell is proceeding with the planned sale for now despite the coronavirus crisis hampering deal-making globally, the people said, asking not to be identified as the matter is private. Egypt’s East Gas Co. is also among suitors that have been invited to the next round of bidding, the people said.
Other bidders could still emerge for the assets, and there’s no certainty the discussions will result in a deal, according to the people. The recent rout in oil prices could affect the amount buyers are willing to pay, and Shell may not be able to achieve its initial price expectations, the people said.
Representatives for Shell, Cairn, and Pharos declined to comment. Calls to Cheiron and East Gas offices in Cairo weren’t answered. Pharos said last month that it was participating in Shell’s sale as part of a consortium.
Shell is targeting the end of this year for finalizing the sale of its oil and gas production assets in the Western Desert after it started the process in early 2020, the company’s deputy chairman for Egypt said in February. It has hired Citigroup Inc. to manage the sale.
“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 mobilized, that will be followed up with exploration in Rosetta as well as the recently awarded Blocks 4 and 6”
The Anglo-Dutch oil major will focus on offshore exploration and the gas business in the country, it said last year.
But, any sale is contingent on finding an appropriate buyer, commercial negotiations and required approvals.