In a bid to soften up investors ahead of its full-year results, Royal Dutch Shell (RDSB) has announced two deals which could take as much as $4.7bn (£3.8bn) out of the oil major's slow-moving $30bn asset disposal programme.
In its most significant sale since last year's debt-loaded acquisition of BG, Shell has agreed to flog a package of UK North Sea assets for up to $3.8bn. This includes $3bn upfront and deferred payments of up to $780m subject to commodity price and future discoveries. The buyer is Chrysaor, a privately-held company backed by EIG's Harbour Energy fund, which will now become the largest independent oil and gas producer in the North Sea.
Chrysaor will take an equity interest in a total of 10 field areas and hubs, including a 22 per cent stake in Buzzard, and the entire interest in Everest and Lomond. Together these fields produced an average of 115,000 barrels of daily production in 2016, and account for around 350m of proven and probable reserves. Industry lobby group Oil & Gas UK described the deal as a "strong vote of confidence in the future of the UK Continental Shelf".
As part of the deal, Royal Dutch Shell’s trading division will continue to market the crude oil and gas produced by the UK North Sea assets it has sold. Linda Cook, chairwoman of Chrysaor, told the Financial Times an offtake agreement would see the oil major keep marketing the output of the existing assets, which would help smooth the transition to the new owners. It is not known how long this agreement will last for.
A second deal, which is expected to complete this quarter, involves the sale of 22.2 per cent equity stake in the Bongkot field in Thailand to a subsidiary of the Kuwait Foreign Petroleum Exploration Company, for $900m. Last year, Shell disposed of upstream assets in the Gulf of Mexico and Canada for a combined maximum consideration of $1.4bn.
