Mubadala unit takes 20% stake in Shell's oil venture

Mubadala unit takes 20% stake in Shell's oil venture Staff Report GULF NEWS Published: April 01, 2008, 15:36


Dubai: Mubadala Development Company (Mub-adala) yesterday said its wholly-owned subsidiary Liwa Energy has purchased a 20 per cent stake in Shell's current exploration and production ventures in Algeria.

Shell holds two production sharing contracts in the Reggane Djebel Hirane and Zerafa permits in Algeria where it is conducting an exploration and appraisal campaign in partnership with Sonatrach, the Algerian national oil and gas company.

The revised interests in the Reggane Djebel Hirane and Zerafa Production Sharing Contracts give a 25 per cent share to Sonatrach (carried interest during exploration), 60 per cent to Shell affiliates and 15 per cent to Liwa Energy.

The new agreement highlights Mubadala's increasing interest in Algeria, where the company has already made a number of significant investments in the energy sector, including several power stations and oil and gas projects.

Among these is the Hadjret Independent Power Project, which represents over a fifth of today's generation capacity in Algeria with initiatives including a natural cycle gas fired power station in Tipaza. Mubadala is also involved in the construction of the first Algerian aluminium smelter at Beni Saf.

The exploration agreement is part of a strategic alliance formed in 2005 between Mubadala and Shell to cooperate in the economic development of new and existing hydrocarbon resources, pursue research and development of economically viable and environmentally acceptable energy solutions in the Middle East and North Africa.

The agreement also provides Mubadala learning and development opportunities with Shell.