Apache Corp, Pharos Energy among bidders for Shell's Egypt onshore assets - sources

Apache Corp, Pharos Energy among bidders for Shell's Egypt onshore assets - sources

Reuters  | Feb 26, 2020 07:53

Apache Corp, Pharos Energy among bidders for Shell's Egypt onshore assets - sources

By Hadeel Al Sayegh and Ron Bousso

DUBAI/LONDON (Reuters) - Royal Dutch Shell's (L:RDSa) onshore Egyptian oil and gas assets have drawn interest from American, Egyptian, Asian and Middle East bidders, two sources familiar with the matter told Reuters.

Shell launched a process at the end of November to sell its onshore upstream assets in the Western Desert to focus on expanding its Egyptian offshore gas exploration.

It appointed investment bank Citigroup (N:C) to run the sale, which could fetch around $1 billion, a source close to the process told Reuters in November.

The oil major's Western Desert portfolio includes stakes in 19 oil and gas leases of which Shell's working interest included output of around 100,000 barrels of oil equivalent per day last year, Reuters reported at the time.

U.S. oil and gas producer Apache Corp (N:APA), Egyptian firms Apex International Energy and Cheiron, and London-listed Pharos Energy (L:PHARP) submitted bids, said the two sources close to the deal, declining to be named as the matter is not public.

There were other Asian and Middle Eastern bidders too, they said. One of the sources said all the bids were non-binding.

Shell, Citi, Apex, Apache and Pharos declined to comment when contacted by Reuters. Cheiron did not immediately respond to requests for comment.

The second phase will see companies short-listed for due-diligence and binding offers, one of the sources said.

The transaction could take a long time, both sources said, citing weaker gas prices and a lengthy process in Egypt since such assets require government approvals.

The second source said the deal was unlikely to close before May.

Egypt's oil and gas sector has seen a rapid expansion in recent years after the discovery of vast offshore gas reserves that has drawn major investments from international companies including Eni (MI:ENI) and BP (L:BP).

At the same time, Egypt's aging oil and gas assets have changed hands. BP last year sold its decades-old stake in the Gulf of Suez Petroleum Company (GUPCO) to Dubai-based Dragon Oil Ltd.

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