Shell to sell some North Sea part of oil, gas fields to Chrysaor for $3.8 bn
31 January 2017
European energy giant Royal Dutch Shell yesterday struck a deal to sell some North Sea oil and gas fields to Chrysaor Holdings Ltd for $3.8 billion, in order to reduce debt post its acquisition of BG Group.
The deal comes a day after Shell agreed to sell its stake in Thailand's Bongkot gas field to Kuwait Foreign Petroleum Exploration Company for $900 million.
The Anglo-Dutch company said in a statement that the deal with Chrysaor includes its interests in 10 operated and non-operated fields areas in Beryl, Bressay, Buzzard, Elgin-Franklin, Erskine, Everest, the Greater Armada cluster, J Block, Lomond, plus a 10 per cent stake in Schiehallion, associated infrastructure, and approximately 400 employees.
Collectively, the assets produced 115,000 barrels of oil equivalent per day in 2016.
The $3.8-billion deal includes an initial payment of $3 billion and up to $600 million between 2018-2021 subject to commodity prices, with potential further payments of up to $180 million for future discoveries.
Chrysaor, backed by Harbour Energy and EIG Global Energy Partners, will receive an investment of up to $1 billion from Harbour Energy, an investment vehicle of EIG Global Energy Partners, together with funds managed by EIG, to support the acquisition and provide future growth capital.
A reserves based loan of up to $1.5 billion will be provided by a syndicate of leading international banks to Chrysaor.
Post closing, Chrysaor will become the UK's leading independent oil & gas company focused on the North Sea
"This deal shows the clear momentum behind Shell's global, value-driven $30 billion divestment programme. It builds on recent upstream divestments in the Gulf of Mexico and Canada," Shell chief financial officer, Simon Henry said in a statement.
"It is also consistent with Shell's strategy to high-grade and simplify our portfolio following the acquisition of BG," he added.