Shell struggles to sell Gaza gas field
LONDON: It may prove to be Royal Dutch Shell’s hardest sell. The Anglo-Dutch group is struggling to find a buyer for its gas field off the Gaza Strip, even among energy companies long used to dealing with projects fraught with political and security risks.
At least one European company has shown interest in the undeveloped Gaza Marine field following a reconciliation deal in October between the two rival Palestinian factions, a source involved in the talks said.
But the firm’s discussions over the field, located about 30km off the Gaza coast, have ground to a halt since tensions in the wider region have taken a fresh turn for the worse, the source said.
“Until the political situation is resolved I really can’t see anything happening here,” he said.
Gaza Marine has long been seen as a golden opportunity for the cash-strapped Palestinian Authority to join the Mediterranean gas bonanza, providing a major source of income to reduce its reliance on foreign aid.
Shell became the field’s main shareholder and operator when it acquired BG Group in 2016 for US$54 billion (RM215 billion). Since announcing the BG purchase the previous year, Shell has sold around US$25 billion in assets to reduce its debt, and hopes to reach US$30 billion by the year-end.
According to two industry sources, Shell is currently in talks with the Palestinian Investment Fund (PIF) to find a buyer for the energy giant’s 55 per cent stake in Gaza Marine.
Plans to develop the field — estimated to hold over one trillion cubic feet (tcf ) of natural gas, the equivalent of Spain’s consumption in 2016 — were put off several times over the past decade.
Gaza Marine, discovered at the end of the last century, lies between two rapidly expanding gas hubs in Egypt and Israel, both of which have attracted huge investments in recent years.
The development of Gaza Marine, though relatively small compared with the giant Eni-operated Zohr field in Egypt or Noble Energy’s Leviathan field in Israel, is estimated to cost around US$1 billion. Gas from the field would run power stations in Gaza and Jenin, and could even be delivered to neighbouring Jordan. Reuters