Shell to expand offshore
Shell is stepping up its exploration push offshore Egypt as the supermajor moves to take advantage of the country's emergence as a gas hub in the Eastern Mediterranean
Moataz Darwish, deputy chairman of Shell Egypt, said his company is in fresh talks with Egypt to acquire new acreage, adding to its portfolio of four offshore concessions awarded last year — two in each of the Mediterranean Sea and Red Sea.
"We are also in discussion for other blocks. We are in the process of multiplying our position and blocks in Egypt," Darwish told Upstream.
Shell is also kicking off exploration at the two offshore Mediterranean blocks awarded last February, he said.
Shell and partner Petronas of Malaysia, which jointly own the Idku liquefied natural gas plant in Egypt, were awarded the offshore Nile Delta North Sidi Gaber Block 4 and North El Fanar Block 6.
The blocks, covering 4300 square kilometres, are close to Shell’s existing Rashpetco operated areas, which produce gas for the Idku LNG facilities.
Exploratory works on the Red Sea blocks, secured in December, will follow once Shell has received parliamentary approval.
Egypt is viewed as an attractive upstream destination due to a benign investment environment and advantageous geographical position that offers easy export routes to both the growing economies of Asia and Europe.
Robust domestic demand and attractive prices for local gas supplies are also drawing an increasing number of major international oil companies, including Shell and ExxonMobil, to Egypt’s offshore sector.
Shell’s intense interest in offshore Egypt comes after the supermajor said late last year it was selling its mature onshore oil assets in the country's Western Desert.
Shell is the only liquefied natural gas exporter from Egypt thanks to its major shareholding in liquefaction trains at the Mediterranean port of Idku, which have a combined capacity of 7.2 million tonnes per annum.
Its foray off Egypt coincides with plans by the country to turn itself into a regional gas hub by importing excess supplies from Israeli and Cypriot offshore fields to use domestically and export through excess capacity at the Damietta plant and Idku.
Shell and US independent Noble Energy are planning to develop their Aphrodite field off Cyprus, which is emerging as a new gas producer in the Eastern Mediterranean.
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