A logo for Shell is seen on a garage forecourt in central London, Britain, March 6, 2014 - REUTERS/Neil Hall/File Photo
CAIRO - 18 May 2022: BG Limited, a wholly owned subsidiary of Shell plc, has signed a Farm Out Agreement (FAO) with ExxonMobil Egypt (Upstream) Limited whereby Shell will fully acquire and operate the Northeast Amriya Offshore Concession in the Nile Delta in the Mediterranean Sea, known as Zone 3 and operated by ExxonMobil.
The completion of the ownership transfer process, the management of the concession area will be transferred to Shell, according to the company, which noted that the agreement is subject to the approval of the relevant government and regulatory agencies.
A Farm Out Agreement (FOA) is a type of contract that allows investors to acquire a stake from an existing project participant by selling all or percentage stake in the venture.
For his part, Minister of Petroleum and Mineral Resources Tarek El Molla said that the acquisition confirms the vitality and competitiveness of the oil and gas sector in Egypt, especially since Shell has a long history of working in the Egyptian oil and gas sector and plays a role in developing offshore oil and gas resources in Egypt.
On the sidelines of the agreement, Chairman of the Board of Directors of Shell companies in Egypt, Khaled Kassem, stated that the conclusion of this important agreement confirms Shell's strong commitment to Egypt.
"This agreement strengthens the company's position in offshore exploration activities in Egypt, and contributes to supporting the company's strategy aimed at playing a pivotal role in the field of gas in the Egyptian market,” he added.
Kassem explained that the proximity of the new concession area to the company's current assets and other exploration areas owned by Shell in the same area will contribute to accelerating the pace of the company's ambitions in the offshore areas. He added that the company has a plan to drill the first well in the new area in early 2023.
The addition of the Northeast Amreya concession area to the production is an important and influential step towards achieving Egypt's growth strategy.
In 2020, BG Delta, wholly owned by Shell, acquired the rights to operate the North Sidi Gaber concession area (Area 4) and North El Fanar (Area 6) located west of the Nile Delta in the Mediterranean, in partnership with BJD PICL Egypt Ltd. The seismic survey work has been completed, and the company is currently analyzing the data to develop a drilling program.