Royal Dutch Shell plans to stop gas production from Egypt’s Rosetta field in the Rashid concession, by July 2017, as dues owed by the Egyptian government continues to accumulate.

The company has refused to pay for field development to offset the natural decline in production.

According to a source with the Egyptian Natural Gas Holding Company (EGAS), the development of Rosetta gas field which produces 40bcf/d of gas requires huge funds, but the field lacks economic feasibility to the foreign partner due to the current prices of gas produced there.

BP bought the Rosetta gas treatment plant in Rashid from Shell for $128 million and has been preparing to connect production from the Fayoum and Giza fields to it.

The EGAS source said that the highest daily capacity of the Rosetta gas treatment plant is 425Mmcf of gas. Out of this 425Mmcf, 420Mmcf will come from Fayoum and Giza fields by 2019.

He added that Shell has cut its investments in the Burullus and Rashid concession areas for this fiscal year to back operation and maintenance from $222m in the fiscal year of 2015/2016 to $158.9m.

The company allocated $22.7m for the operational costs of the field and $1.4m for field maintenance without developing the field.

As initially revealed, the Ministry of Petroleum owes Shell $1.3billion for the foreign partner share of the gas produced from both the Rashid and Burullus fields, Egypt Oil & Gas news reports.

The Egyptian government acquires the foreign partner’s share in Burullus and Rashid gas at $50m per month, but the dues are not paid early enough as a result of the shortfall in foreign currency in the country.

Anita Fatunji