Shell simplifies portfolio following BG acquisition with Thai, UK asset sales

The Hague-based LNG giant Shell reached two separate agreements for the sale of its assets in Thailand and UK North sea as part of the portfolio simplification, following its acquisition of BG. 

Under the agreement with KUFPEC Thailand Holdings, a unit of Kuwait Foreign Petroleum Exploration Company, Shell agreed to sell its two subsidiaries, Shell Integrated Gas Thailand and Thai Energy, which together hold a 22.222 percent equity stake in the Bongkot field, and adjoining acreage offshore Thailand consisting of Blocks 15, 16 and 17 and block G12/48.

The transaction is valued at US$900 million and is part of the company’s $30 billion divestment program. It is expected to be completed in the first quarter of 2017, the company said in its statement on Tuesday.

Shell’s partners in the Bongkot Asset are the operator of the field, PTTEP, with 44.445 percent equity, and Total with 33.333 percent equity.

In a separate statement, Shell said it has agreed to sell a package of UK North Sea assets to Chrysaor for a total of up to $3.8 billion, including an initial consideration of $3.0 billion and a payment of up to $600 million between 2018-2021 subject to commodity price, with potential further payments of up to $180 million for future discoveries.

The package of assets consists of Shell’s interests in Buzzard, Beryl, Bressay, Elgin-Franklin, J-Block, the Greater Armada cluster, Everest, Lomond and Erskine, plus a 10 percent stake in Schiehallion.

The decommissioning costs associated with the package are currently expected to be $3.9 billion, of which Shell will retain a fixed liability of $1 billion and Chrysaor will assume the remaining liability.

The deal is expected to be completed in the second half of 2017.

The package represents total production of some 115,000 boe/d (Shell share) in 2016. Shell’s total UK North Sea production during 2016 was around 211,000 boe/d.

LNG World News Staff