Petroleum Ministry’s dues to Shell increase to $1.35bn from Borollos, Rashid gas returns
The Ministry of Petroleum’s outstanding dues to the Royal Dutch Shell company increased to $1.35bn from $1.30bn in October from the returns of the foreign partner’s gas share produced from Rashid and Borollos fields’ concessions, which BG recently acquired.
A source said that the Ministry of Petroleum did not fulfill its promise to its foreign partner Shell to repay a part of its dues before the end of 2016.
The source pointed out that the ministry promised its foreign partners to pay part of the financial dues throughout 2016, after failing to adhere to the previous deadlines set with another partner. The Ministry of Petroleum’s dues to its foreign partners reached $3.6bn, according to Minister of Petroleum Tarek El Molla.
The source added that Shell had decided to postpone the implementation of phase 9B in Borollos fields, until the Ministry of Petroleum commits to its promises and repays financial dues.
He pointed out that the government acquires roughly $50m of the foreign partner’s gas share of Rashid and Borollos, and has not fully repaid it due to the US dollar shortage Egypt is facing.
He pointed out that the ministry’s dues owed to BG represents 37.5% of the government’s total debt to foreign oil companies operating in Egypt.
He said that the Ministry of Petroleum has agreed for Shell to export a 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.
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 suspended the work of phase 9B in the Mediterranean Sea concession area. The Saipem rig moved from the site after completing phase 9A and linked it to the national gas grid six months ago.