Shell to sell onshore oil fields in Gabon to Carlyle Group

25 Mar 2017


European oil and gas giant Royal Dutch Shell yesterday struck a deal to sell its onshore oil fields in Gabon to US private equity firm Carlyle Group for $587 million.

Carlyle will also assume debt of $285 million as part of the transaction.

Assala Energy Holdings, a portfolio company owned by Carlyle International Energy Partners, will acquire these assets with equity from Carlyle International Energy Partners and Carlyle Sub-Sahara Africa Partners.

Post closing, around 430 local Shell employees in Gabon will become part of Assala Energy.

The sale is part of Shell's plans to sell assets worth $30 billion after it completed its $49-billion acquisition of BG Group in February last year. (See: Shell plans to sell assets worth $30 bn)

Shell has been operating in Gabon for 56 years and is one of the biggest investors in the country's oil-and-gas sector.

The sale includes all of Shell's onshore oil and gas operations and related infrastructure in Gabon - five operated fields - Rabi, Toucan-Robin, Gamba-Ivinga, Koula-Damier, and Bende-M'Bassou-Totou, its stake in four non-operated fields - Atora, Avocette-M'Boukou, Coucal, and Tsiengui West, as well as the associated infrastructure of the onshore pipeline system from Rabi to Gamba and the Gamba Southern export terminal.

Shell onshore in Gabon produced approximately forty-one thousand barrels of oil equivalent per day in 2016 and Shell Trading will continue to have lifting rights from the assets for the coming 5 years.

Andy Brown, Shell's upstream director, said, ''The decision to divest was not taken lightly, but it is consistent with Shell's strategy to concentrate our Upstream footprint where we can be most competitive. Shell will continue to pursue opportunities in Sub Saharan Africa.''

''Together with recent divestments in the UK, Gulf of Mexico and Canada, this transaction shows the clear momentum behind Shell's $30-bn divestment programme, and it helps us to high-grade and simplify our upstream portfolio following the acquisition of BG,'' he added.

Plummeting crude prices have hit oil companies across the world and slashed earnings of other oil majors, including Exxon Mobil Corp and BP Plc, retarding investments in new oil exploration while at the same time hitting investor returns.

The London-listed company, like other rivals, has scaled down on spending on new projects. It recently announced that it would reduce its planned capital spending over the next three years by $15 billion.

Shell has hit hurdles in its $30 billion assets sale program since oil prices have crashed and is currently hovering at around $47 a barrel. When Shell sold assets worth $20 billion in 2014-15, oil prices were at around $100 a barrel.

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