Shell To Sell Package Of UK North Sea Assets To Chrysaor For Up To $3.8 Bln
THE HAGUE (dpa-AFX) - Oil & gas giant Royal Dutch Shell plc (RDS-B, RDSB.
L, RDSA.L, RDS-A) announced Tuesday that it has agreed to sell a package of UK North Sea assets to Chrysaor for a total of up to $3.8 billion.
The price includes 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% stake in Schiehallion.
Based on the initial consideration received, Shell expects to record an accounting gain on sale against the values of both the Shell and former BG assets included in the package.
Shell said 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 subject to partner and regulatory approvals, with completion expected in the second half of 2017. The transaction's effective date is 1 July 2016.
The company said the package represents total production of some 115kboe/d (Shell share) in 2016. Shell's total UK North Sea production during 2016 was around 211kboe/d.
Following completion, Shell will retain a significant, more focused and strengthened presence in the UK North Sea, with production from the Schiehallion redevelopment and Clair Ridge project expected to come onstream.
On completion, around 400 staff are expected to transfer to Chrysaor, subject to a detailed scoping exercise and staff consultation, on their existing terms and conditions of employment.
Copyright RTT News/dpa-AFX
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