Cheiron Petroleum Corporation  announced that it has completed the acquisition of 50% of Shell’s upstream oil and gas assets in the Western Desert, according to statement from the company.

The remaining 50% of the interests will be purchased by Cairn Energy PLC , Cheiron’s strategic partner.

The acquisition confirms Cheiron position as a leading Egyptian oil and gas operator and, following its successful long term investment program in the Gulf of Suez, cements its position as a Western Desert producer, the statement added.

The acquired portfolio comprises over 20 producing fields, with their associated facilities and pipeline infrastructure, coupled with future development and exploration drilling opportunities.

Cheiron will operate the producing and development concessions, leveraging its extensive mature fields development expertise, and Cairn will operate three of the exploration blocks, drawing on its international exploration experience. The field activities will continue to be managed by the Bapetco Joint Operating Company.

The consideration paid for the interests is circa $323 million (net Cheiron) with additional contingent payments of up to $140 million, depending on oil price and exploration success.

Funding for the acquisition has been provided by a syndicate of nine International and European, Middle Eastern and African Banks and Lenders and advisory support provided by Rothschild & Co and Gaffney Cline and Associates.

David Thomas, Chief Executive of Cheiron commented: “Cheiron is delighted to have completed this transaction and would like to thank the Government of Egypt for its continuing efforts to maintain an attractive investment climate for the energy sector and for approving Cheiron and Cairn’s entry into the concessions.

We look forward to working with Cairn, as our new partner, and with the pre-eminent Bapetco Joint Operating Company as we collectively work to increase the production levels and reserves for the fields.  

We have an aggressive work program planned and, in the very short term, will be significantly increasing the pace of development and exploration drilling across the concessions to rapidly boost the oil and gas production rates.