Shell Offers Egypt Field for Sale, Production to Stop

Shell is going to stop production from its Rosetta gas field offshore Egypt by July 2017 and it has put it up for sale, according to Daily News Egypt. According to the report, Shell refuses to invest further in the development of the gas field, needed in order to maintain production, because of unpaid dues by the Egyptian government.

Currently, the field's daily production stands at 40mn ft³/d. The Egyptian Ministry of Petroleum owes Shell $1.3bn for its part in Rahsid (of which Rosetta is a part) and Borollos concessions. Shell gained the assets when it bought BG earlier this year. The two concessions are part of the West Nile Delta (WND) project.

A senior executive from Egypt's national gas company Egas told the website that the Rosetta development requires huge investments and current gas prices in the Egyptian market do not justify it. In the fiscal year 2015-16 Shell cut its investment in operation and maintenance of Rosetta gas field and Borollos gas treatment plant from $222mn to $158.9 mn. According to the source, without further investment production from Rosetta and Borollos gas fields declines every month by 10mn ft³/day.

Last April Shell sold the Rosetta gas treatment plant in Rashid to BP for $128mn. Following the sale it transmits gas from Rosetta to its Borollos gas treatment plant.

Ya'acov Zalel