Shell lowers investments in Egypt’s Borollos, Rasheed concessions to $159m

Royal Dutch Shell reduced its investments for the current fiscal year (FY) in Borollos and Rasheed concessions to only $158.9m for maintenance and operating expenses.

A source within the petroleum sector told Daily News Egypt that the company allocated operating expenses valued at $96.7m to Borollos fields and $38m for periodical maintenance to the wells.

The source added that Shell allocated $22.7m for the operating expenses of Rosita field in Rasheed’s concession, and $1.4m for maintenance operations. There has been no increases in the performance of the natural gas production rates.

The source noted that Borollos and Rasheed fields’ production declines on a daily basis by 10m feet of gas.

He mentioned that Shell was planning to allocate another $1.4m towards investments to the current FY, in order to establish 9B phase project in Borollos fields. However, the company postponed injecting its investments until obtaining part of its dues.

Daily News Egypt previously published that the Ministry of Petroleum’s dues to the Royal Dutch Shell Company amounts to about $1.3bn, from the returns of the foreign partner’s gas share produced from Rasheed and Borollos fields’ concessions, which BG, a subsidiary of Royal Dutch, recently acquired.

Daily News Egypt also published that the government had received roughly $50m of the foreign partner’s gas share of Rasheed and Borollos, and has not fully repaid it due to the US dollar shortage problem Egypt is facing.

The ministry’s dues owed to BG represents 45% of the government’s total debt to foreign oil companies operating in Egypt.

It is noteworthy that the price of gas in phase 9B in the deep Mediterranean waters was agreed to be calculated with a pricing equation linked to the price of Brent crude at a maximum of $5.88 and a minimum of $2.5 per million BTUs.

Shell has also suspended the work of phase 9B in the Mediterranean Sea concession area. The Saipem rig moved from the site after completing phase 9A and was linked to the national gas grid six months ago.

Daily News Egypt also published that the Ministry of Petroleum has agreed for Shell to export the liquefied gas shipment every 20 days through the EDCO liquefaction plant, and to increase gas quantities in case natural gas is available in the national grid.

Source: Daily News Egypt

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