Cairn, Pharos Are Said to Advance in Deal for Shell Egypt Assets

(Bloomberg) -- A consortium of Cairn Energy Plc, Pharos Energy Plc and Egypt’s Cheiron Petroleum has proceeded to a second round of bidding for Royal Dutch Shell Plc’s onshore assets in the African country, in a deal that could value the business at as much as $1 billion, people familiar with the matter said.

Shell is proceeding with the planned sale for now despite the coronavirus crisis hampering deal-making globally, the people said, asking not to be identified as the matter is private. Egypt’s East Gas Co. is also among suitors that have been invited to the next round of bidding, the people said.

Other bidders could still emerge for the assets, and there’s no certainty the discussions will result in a deal, according to the people. The recent rout in oil prices could affect the amount buyers are willing to pay, and Shell may not be able to achieve its initial price expectations, the people said.

Representatives for Shell, Cairn and Pharos declined to comment. Calls to Cheiron and East Gas offices in Cairo weren’t answered. Pharos said last month that it was participating in Shell’s sale as part of a consortium.

Shell is targeting the end of this year for finalizing the sale of its oil and gas production assets in the Western Desert, after it started the process in early 2020, the company’s deputy chairman for Egypt said in February. It has hired Citigroup Inc. to manage the sale.

The Anglo-Dutch oil major will focus on offshore exploration and the gas business in the country, it said last year.

©2020 Bloomberg L.P.