Shell needs to sell $30 billion of assets by 2018 as it seeks to pay off debt following its takeover of BG Group.
The deal comprises an initial consideration of $3 billion with a payment of up to $600 million between 2018- 2021 subject to commodity price, with potential further payments of up to $180 million for future oil finds.
In Q4 2017, Shell will record an accounting gain on sale of $1 billion against the values of both the Shell and former BG assets included in the package.
The deal represents about half of Shell’s 2016 North Sea output and the package includes Shell’s interests in several fields – notably Buzzard, Beryl, Elgin-Franklin and Schiehallion.
The sale means Chrysaor has now become the biggest independent operator in the North Sea. More than 250 staff have transferred to Chrysaor as part of the transaction.
Shell retains 50 interests in North Sea fields, 30 North Sea platforms and two FPSOs and a Shell spokesman insisted it “retains a significant, more focused and strengthened presence in the UK North Sea, to which it remains committed”.
He added: “Completion of this deal shows the clear momentum behind Shell’s $30bn divestment programme and is in line with our drive to simplify the upstream portfolio and re-shape the company into a world class investment.”
Industry observers hope that more deals like this will help extend the life of the basin, act as catalysts for fresh investment and reinvigorate exploration activity in both new and existing portfolios.
2 Nov 2017