Saturday 17 November 2018

Shell offloads Norwegian interests as divestment continues

Shell said the deal is part of its efforts to sell off 30 billion US dollars of assets.

Shell is selling off its interests in two Norwegian assets (Anna Gowthorpe/PA)
Shell is selling off its interests in two Norwegian assets (Anna Gowthorpe/PA)

By Ravender Sembhy, Press Association City Editor

Royal Dutch Shell is to sell off its interests in two Norwegian oilfields for 556 million US dollars (£422 million) as the energy giant presses ahead with a divestment programme.

The group will offload its 44.56% stake in Draugen and 12% interest to Norway-focused Okea.

Shell said the deal is part of its efforts to sell off 30 billion US dollars (£22.7 billion) of assets.

This deal is a good strategic move for both companies

This deal is a good strategic move for both companies Shell upstream director Andy Brown

Andy Brown, Shell’s upstream director, said: “Shell has a long and proud history in Norway. We continue to have strategic, long-term positions in Troll and Ormen Lange and are actively seeking new growth opportunities.

“This deal is a good strategic move for both companies.”

Shell said its share of Draugen and Gjoa’s production was 25,000 barrels of oil a day in 2017, or 14% of its Norwegian production.

Decommissioning costs for the assets are estimated to be around 120 million US dollars (£91 million), and Shell will stump up 80%, with Okea paying the rest.

Shell has been selling off assets at regular intervals this year.

In May, it disposed of its entire stake in Canadian Natural Resources for 3.3 billion US dollars (£2.5 billion), while in April it offloaded its Argentinian downstream business for 950 million US dollars (£720 million).

Shell has also sold its 20% stake in Iraq’s West Qurna 1 oil field for 406 million US dollars (£307.6 million).

In April, the oil giant posted its highest quarterly profit for at least three years thanks to resurgent oil prices.

It reported a 42% rise in underlying quarterly profits to 5.3 billion US dollars (£3.8 billion) for the first three months of the year.

Bottom-line profits surged 69% to 5.7 billion US dollars (£4.1 billion).

The group’s results were being buoyed by resurgent oil prices, higher production and years of cost-cutting.

Press Association

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