UK-headquartered energy giant Shell has reached an agreement with Hungarian multinational oil & gas company MOL Group for the sale of its 100%-owned subsidiary BG Cyprus Limited for up to $720 million.
This sale is significant as BG Cyprus holds a 35% non-operated interest in Cyprus Offshore Block 12, which contains the highly valuable Aphrodite gas field. Located approximately 170 kilometers southeast offshore in the eastern Mediterranean, the Aphrodite gas field is expected to play a major role in energy production in the region.
Discovered in 2011, the Aphrodite gas field has undergone several drilling campaigns that have confirmed its potential. Current estimates suggest that the field holds around 104 billion cubic meters (bcm) of contingent gas and 8 million barrels (MMbbl) of condensate resources. The gas produced from this field is projected to be sold to the Egyptian Natural Gas Holding Company (EGAS), further enhancing the energy links between Cyprus and Egypt.
In this joint venture, Chevron Cyprus acts as the operator, also holding a 35% interest, while NewMed Energy possesses a 30% non-operating interest. Once the transaction is finalized, MOL Group will take over Shell’s rights and obligations related to this interest, marking a pivotal shift in the operational landscape of the Aphrodite project.
It’s important to note that BG Group acquired its interest in the Aphrodite field back in 2015, and this acquisition transitioned to Shell following the latter’s purchase of BG Group in February 2016. Shell’s ongoing commitment to Egypt remains robust, reflecting a stable strategic presence in the country even as it pulls back from certain assets.
“We believe Aphrodite remains an attractive development opportunity and will play an important role in supporting regional energy needs,” commented Cederic Cremers, Shell’s Integrated Gas President. He emphasized that the decision to divest stemmed from a commitment to disciplined capital management and a strategic refocusing on initiatives that enhance Shell’s integrated LNG value chain.
The development plan for the Aphrodite field is ambitious, involving the drilling of four wells and the establishment of an independent floating production facility. A final investment decision (FID) is anticipated in 2027, with the first gas expected to flow in 2031. Notably, the project also includes plans for a 250-kilometer subsea pipeline that will be connected to Egypt’s gas transmission network, further reinforcing energy infrastructure in the region.
Subject to regulatory approval and closing conditions, this transaction is projected to complete in early 2027. “This step is also in line with our E&P strategy that focuses on strengthening our international portfolio while building strategic partnerships with highly reputable international companies,” said MOL Group Chairman and CEO Zsolt Hernádi. He expressed optimism about entering the Cypriot market and expanding within the EU, viewing it as a significant milestone for MOL Group.
Zsolt Hernádi further remarked, “This project represents the most promising growth opportunity for MOL Group’s E&P business since acquiring a stake in the giant ACG field in Azerbaijan in 2019, and I am confident it will play a key role in shaping our future business lines.” This strategic acquisition not only enhances MOL’s portfolio but also aligns with its long-term growth objectives within the offshore energy sector.
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