Shell agrees to sell nearly half of its less profitable North Sea assets for $3.8bn
As part of its drive to ditch $30bn worth of assets, Shell has agreed to sell a package of North Sea assets for $3.8bn (£3bn) to UK oil and gas company Chrysaor.
Shell has been flogging assets in an effort to reduce debt following its £35bn takeover of BG Group.
Read more: Shell continues its divestment drive with Saudi joint venture sale
Earlier today, Shell also announced the sale of a stake in Thailand's Bongkot gas field to Kuwait Foreign Petroleum Exploration Company for $900m.
Chrysaor is set to become the largest independent operator in the North Sea, where Shell has struggled to make a profit in recent years, after the deal is complete. Shell's $7bn worth of North Sea assets will nearly be sliced in half.
Subject to regulatory approvals, the deal is expected to be completed in the second half of this year. It consists of an initial consideration of $3bn and a payment of up to $600m between 2018-2021, depending on oil price, with potential further payments of up to $180m for future discoveries.
Chrysaor said the assets being acquired, which include Shell's interests in Buzzard and a 10 per cent stake in the BP-operated Schiehallion, produced 115,000 barrels of oil equivalent per day (boepd) in 2016 with operating costs across the portfolio of under $15 per barrel.
Other fields include Beryl, Bressay, Elgin-Franklin, J-Block, the Greater Armada cluster, Everest, Lomond and Erskine, the companies said.
Shell added around 400 staff are expected to transfer to Chrysaor on completion of the deal.
Andy Brown, Shell’s upstream director, said the agreement will deliver value to Shell, Chrysaor and the UK as a whole.
Later this week the oil giant is forecasted to post a profit of $8.17bn (£6.51bn), more than double its profit of $3.8bn the previous year.