 have reached an agreement to sell £2.4 billion worth of their North Sea assets to privately backed Chrysaor.){kind=link}
Royal Dutch Shell (LON:RDSA) have reached an agreement to sell £2.4 billion worth of their North Sea assets to privately backed Chrysaor.
The international oil company has agreed to offload around half of Shell’s North Sea output in a bid to continue debt reduction exercises. It aims to sell around $30 billion in assets by the end of the year.
Upon competition of the deal, Chrysaor is said to acquire around 400 staff from Shell, “subject to a detailed scoping exercise and staff consultation”, Shell commented.
“This transaction shows the clear momentum behind Shell’s… divestment programme,” the company continued.
In a statement, Chrysaor said of the agreement:
“Chrysaor is acquiring a high quality package of assets which combine low cost production, a substantial reserves and resources base with strong cash flows and a highly competent and skilled workforce.
“These assets, combined with our own experience and the outstanding team who will transfer from Shell, provide an excellent platform for change and growth in the North Sea.”
The agreement will cover Shell’s interests in the fields Buzzard, Beryl, Bressay, Elgin-Franklin, J-Block, the Greater Armada cluster, Everest, Lomond and Erskine, as well as its 10% stake in Schiehallion.
The deal is to be partly financed by Harbour Energy, which is an operative of the US investment company EIG. After completiton, Chrysaor is set to become the UK’s largest oil and gas producer.
The oil industry has been struggling as of recent years due to overproduction in the market outpacing demand. However, a much anticipated OPEC deal to cut production in January has since lifted investors concerns. OPEC countries formally agreed to cap production to 1.8 barrels a day in the interest of stimulating a surge in prices and profitability.
Shares in Royal Dutch Shell are up 1.32 percent as of 13.49 (GMT).