Shell sells multiple North Sea assets to Chrysaor for $3.8bn
31 Jan 2017
Oil and gas major Royal Dutch Shell has agreed to sell $3.8 billion (£2.46bn) worth of its North Sea assets to exploration firm Chrysaor.
The deal includes stakes in Shell’s Buzzard, Beryl, Bressay, Elgin-Franklin, J-Block, the Greater Armada cluster, Everest, Lomond and Erskine oilfields, plus a 10% stake in Schiehallion – in which Shell retains 45%.
Shell could also receive an additional $180m, dependent on the achievement of certain exploration milestones and oil prices.
Should the average price of oil fall in or below the range of $47.50 to $52.50 boe between 2018-2021, Shell would have to make a payment to Chrysaor of up to $25m a year.
Simon Henry, Shell’s chief financial officer, said: “This deal shows the clear momentum behind Shell’s global, value-driven $30bn divestment programme. It builds on recent upstream divestments in the Gulf of Mexico and Canada.”
On completion, roughly 400 staff are expected to transfer to Chrysaor. However, this would be subject to a scoping exercise and staff consultation on their existing terms and conditions of employment.
Despite this, Andy Brown, Shell’s upstream director, said this latest deal represented a vote of confidence in the UK North Sea and offered proof of the industry’s increasing competitiveness.
Last week BP struck a similar deal, selling 25% of its North Sea Magnus oilfield, a 25% stake in various pipelines and a 3% stake in the Sullom Voe Terminal to oil and gas production company EnQuest for $85 million (£68m).