Shell enters new partnership in Egypt's Red Sea blocks

CAIRO - 13 December 2021: Shell Exploration & Production (93) B.V., subsidiary of Royal Dutch Shell plc., announced Monday signing Farm Out Agreements (FOAs) with QatarEnergy, under which QatarEnergy will acquire 17 percent stake in each of Shell-operated Block 3 and Block 4 in the Egyptian Red Sea.

Farm Out Agreement (FOA) is a type of contract which enables an existing project participant to add new parties to the project by selling a percentage stake in the venture.

It added that these FOAs are subject to government and regulatory approvals, without prejudice to pre-emption rights.

This follows an earlier dilution of Blocks 3 and 4 to BHP Petroleum (Egypt) Limited, which is also subject to government and regulatory approvals, noting that Shell will remain the operator in both blocks.

“Bringing such reliable partners into the project will enable us to leverage our joint expertise as we progress the opportunity. It is also worth highlighting that we were able to attract new market entrants thanks to the favourable investment climate in Egypt,” Khaled Kacem, Shell’s Vice President & Country Chair for Egypt, said.

The partner equity post-FOA completion will be as follows: Block 3: Shell 43 percent (Operator), Tharwa 10 percent, BHP 30 percent, QatarEnergy 17 percent. Block 4: Shell 21 percent (Operator), Mubadala Petroleum 27 percent, Tharwa 10 percent, BHP 25 percent, QatarEnergy 17 percent.