Kuwait Foreign Petroleum Exploration Company (KUFPEC) unit KUFPEC (Egypt) has reached an agreement to buy a 40% stake in oil and gas major Shell's Block 3 offshore Egypt.

The financial terms of the transaction were not disclosed.

As per the terms of the farm out agreement (FOA), Shell will continue to serve as the operator of the block, which is located in the Egyptian portion of the Mediterranean Sea. The FOA is subject to relevant government and regulatory approvals.

Shell, through its subsidiary BG International, acquired Block 3, also known as North East El-Amriya offshore area, from ExxonMobil Egypt in 2022.

KUFPEC CEO Mohammad Salem Al-Haimer said: "We are glad to expand our presence in Egypt in cooperation with our international operating partners in highly prolific exploration basins in line with our 2040 strategy.

“This new partnership in Block 3 empowers KUFPEC to boost its offshore assets and exploration activities in Egypt.”

In 2020, KUFPEC was awarded the North Ras Kanayes Offshore block in the Mediterranean Sea.

Shell vice-president and country chair for Egypt Khaled Kacem said: “I am very pleased with our new partnership in the Nile Delta Block 3, which will enable us to leverage our joint expertise as we progress the opportunity. Concluding this agreement strengthens Shell’s offshore position.

“The proximity of this block to Shell’s existing assets and other exploration blocks Shell holds in the area will help accelerate the company’s offshore ambitions and support Egypt in meeting its energy supply needs.”

Shell’s wholly owned subsidiary BG Delta, in partnership with PICL (Egypt), acquired the North Sidi Gaber Concession (Block 4) and the North Al Fanar Concession (Block 6) in the West Nile Delta in 2020.

Last month, Shell Egypt and partners commenced drilling operations in Blocks 3 and 4 in the Mediterranean Sea.

As part of the exploration plan, three wells will be drilled in succession.