Noreco buying Shell assets in Denmark for $1.9 billion
Norwegian Energy Company ASA has reached an agreement to buy Shell’s assets in Denmark for $1.9 billion.
As part of the transaction, Noreco will acquire Shell’s shares in Shell Olie-og Gasudvinding Danmark B.V. (SOGU) which holds a 36.8% non-operating interest in the Danish Underground Consortium (DUC).
DUC is a joint venture between Total (31.2%), Shell (36.8%), Chevron (12.0%) and Nordsøfonden (20.0%) cooperating to recover oil from the Sole Concession holder’s area of the Danish North Sea. Total recently announced the acquisition of Chevron’s (12.0%) interest, which remains subject to the approval of partners and relevant authorities. The Sole Concession covers 1,635.7 km² of the DCS. DUC is operated by Total
According to Noreco, the transaction will establish Noreco as an E&P company on the Danish Continental Shelf (“DCS”), and position it as the second largest oil and gas producer in the country.
As part of the agreement, Noreco will assume all of Shell’s existing commitments and obligations, including the Tyra redevelopment and the decommissioning costs associated with the assets.
The sale represents production of some 67,000 boe/d (Shell share) in 2017. Under the agreement, Shell Trading and Supply and Shell Energy Europe Limited will continue to have oil and gas lifting rights from the SOGU assets for a period after completion.
Local SOGU staff mostly dedicated to the DUC will pass to Noreco along with the business with their existing contracts of employment intact and full continuity of service.
Andy Brown, Shell’s Upstream Director, said: ‘’Today’s announcement is consistent with Shell’s strategy to simplify its portfolio through a $30 billion divestment programme, and contributes to our goal of reshaping the company into a world-class investment case.’’