Daily News Egypt reports that Shell has offered the Rosetta concession, offshore Egypt, for sale. Daily News Egypt said a source close to the company told it that Shell decided not to carry out any development operations in Rosetta.
‘Development will be expensive with almost no economic feasibility, considering the price of gas produced there,’ he explained.
He said the Rosetta field currently produces 40 million cubic feet of gas per day and will stop producing by July as the natural decay of productivity is not offset by development.
He pointed out that BP acquired the Rosetta gas treatment plant in Rashid from Shell for $128m. BP received the plant in April and began preparations to link it to the Fayoum and Giza fields.
The source said that the maximum capacity of the Rosetta gas treatment plant is 425 million cubic feet of gas per day, of which 420 million cubic feet will come from the Fayoum and Giza fields by 2019.
He added that Royal Dutch Shell moved the current supply extracted at the Rosetta field to the Borollos gas treatment plant after selling the Rosetta gas treatment plant to BP.
The source explained that Shell has reduced its investments for the current fiscal year in Borollos and Rashid concession areas to cover only operation and maintenance costs. He added that in the fiscal year (FY) 2016/2017 Shell plans on investing $158.9m, down from $222m in FY 2015/2016.
He said the company allocated about $96.7m to operate the Borollos field and $38m for periodical maintenance.
He added that Shell allocated $22.7m for operational costs of the Rosetta field and $1.4m for field maintenance without new developments.
He noted that production of Borollos and Rashid fields naturally declines by 10m cubic feet of gas per day.
Daily News Egypt had previously revealed that the Ministry of Petroleum owes Shell $1.3bn, for their share of the gas produced from the Rashid and Borollos fields.
The government collects roughly $50m a month in dues owed to Shell for the Borollos and Rashid fields, however; they have been unable to pay the company due to the ongoing foreign currency shortage. (Source: Daily News Egypt)