Shell Signs FOA with KUFPEC for Stake in Egypt’s Mediterranean Block
BG International Limited, a subsidiary of Shell plc, has announced that it signed a Farm Out Agreement (FOA) with KUFPEC, a wholly owned subsidiary of Kuwait Petroleum Corporation, where KUFPEC will acquire a 40% stake in Block 3 in NorthEast El-Amriya in the Egyptian Mediterranean Sea.
A farm-out agreement (FOA) is a type of contract that enables an existing project participant to add new parties to the project by selling a percentage stake in the venture.
Following government and regulatory approvals, the agreement will allow both companies to leverage their joint expertise. Shell will continue to operate in Block 3, holding 60%.
“I am very pleased with our new partnership in Nile Delta Block 3, which will enable us to leverage our joint expertise as we progress the opportunity. Concluding this agreement strengthens Shell’s offshore position. The proximity of this block to Shell’s existing assets and other exploration blocks Shell holds in the area will help accelerate the company’s offshore ambitions and support Egypt in meeting its energy supply needs,” said Khaled Kacem, Shell’s Vice President and Country Chair for Egypt.
“We are glad to expand our presence in Egypt in cooperation with our international operating partners at highly prolific exploration basins in line with our 2040 strategy. This new partnership in Block 3 empowers KUFPEC to boost its offshore assets and exploration activities in Egypt,” stated Salem Al-Haimer, KUFPEC Chief Executive Officer (CEO).
“KUFPEC is already active in this region, as it has been awarded the North Ras Kanayes Offshore Block in the Mediterranean Sea in 2020,” the KUFPEC CEO added.
In August 2023, Shell Egypt and partners commenced drilling activities in Nile Delta blocks 3 and 4, located in the Mediterranean Sea. The exploration project entails three wells to be drilled consecutively.
