Shell Seeks Shale Gas Price Hike

Anglo-Dutch major Shell is looking to revise the price it will receive for shale gas produced in Egypt’s Western Desert due to the unexpected high costs of horizontal drilling or fracking.

In December Shell and US-firm Apache finalized a deal with Egypt to drill the first horizontal wells into shale rock on the Western Desert’s Northeast Abu al-Gharadig block (MEES, 19 December 2014). The gas price agreed with both firms is $5.45/mn BTU, but Shell is now believed to be renegotiating the price.

The budget for the joint operation to drill horizontally, undertaken by both firms’ JVs with Egypt’s state oil firm EGPC (Shell as Bapetco and Apache as Khalda), is reportedly $23mn.


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