Egypt yet to pay Shell $1.1Bn in exchange for its shares

The dues owed to British Gas (BG) and Dutch company Shell by the Ministry of Petroleum have increased to $1.1bn, compared to $1bn in April, in return for the partner’s share in the produced gas from El-Borollos and Rasheed fields.

A source close to government negotiations said the government is taking the share of its partner, Shell, from the gas of El-Borollos and Rasheed, worth approximately $50m, but cannot pay all of it due to the US dollar crisis currently facing Egypt.

The source explained that the Ministry of Petroleum failed to fulfil its promise to its partner, which is to pay $400m from BG’s dues in June 2016. The reasoning could be tied to the Central Bank of Egypt (CBE) not providing the amount following the decrease of the Egyptian pound against the price of the US dollar.

The source added that the ministry had promised its partner would pay part of its financial dues in 2016. No date can be determined for paying these dues because it is the decision of the Ministry of Finance and the CBE to provide US dollars to pay part of the Ministry of Petroleum’s debts, which amounted to $3.4bn.

The source pointed out that the Ministry of Petroleum’s financial dues to BG represent more than 30% of total government debt to foreign oil companies operating in Egypt.

The source added that Shell will not resume work in stage 9B until it has received part of its financial dues, as well as allowing the company to export about 100m to 150m cubic feet gas per day from Edco liquefaction factory owned by Shell’s BG.

The source said that the Ministry of Petroleum approved the export of monthly liquefied gas shipments and increased shipments in case of the availability of gas in the national gas grid.

The source further said that the gas from the 9B stage in the deep Mediterranean water was priced through a pricing formula linked to the price of Brent crude oil with a maximum of $5.88 and a minimum of $2.5 per million British Thermal Units.

Four months ago, Shell halted work in the 9B stage in its concession area in the Mediterranean, and moved Saipem drillship from the site after finishing 9A operations and linking the site to the national gas grid.

By: Mohamed Adel

Source: Daily News Egypt

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