Royal Dutch Shell Plc, through its Norwegian affiliate A/S Norske Shell, reached an agreement with Norway-based oil company OKEA AS to sell its entire 44.56 percent interest in Draugen and 12 percent interest in Gjoa offshore fields for NOK 4.52 billion ($556 million), the company announced Tuesday.
The Shell share of the assets’ production in the Norwegian North Sea amounted to approximately 25 thousand barrels of oil equivalent per day in 2017, representing about 14 percent of Shell's Norwegian production in 2017, according to a statement from the energy giant.
The decommissioning costs associated with the assets are currently estimated at NOK 1 billion after tax ($120 million). Shell will retain 80 percent of this liability up to an agreed cap while OKEA will assume the remaining liability, it said.
The transaction is subject to regulatory approval and is expected to complete in the fourth quarter of 2018. Upon completion, OKEA will become the new operator of Draugen, whose onshore and offshore staff is expected to transfer to OKEA with full continuity of service.
Shell's Upstream Director Andy Brown said the deal was part of Shell’s global, value-driven $30 billion divestment program and was consistent with the company's strategy to high-grade and simplify its portfolio.
'Shell has a long and proud history in Norway. We continue to have strategic, long-term positions in Troll and Ormen Lange [fields] and are actively seeking new growth opportunities,' he added.
According to the statement, Shell remains committed to Norway, operating Ormen Lange and Knarr and partnering in Troll, Valemon and Kvitebjorn fields.
In addition, the company is drilling two exploration wells on the Norwegian continental shelf this year. A/S Norske Shell continues to be the Technical Service Provider of the Nyhamna Gas Processing Plant, and partner in the Norwegian full-scale carbon capture and storage (CCS) project and CCS test facility at Mongstad.
By Hale Turkes
Anadolu Agency
energy@aa.com.tr