Royal Dutch Shell signed an agreement, through its subsidiary Shell Offshore, to sell its 22.45% non-operated interest in the Caesar-Tonga oilfield in the Gulf of Mexico to a subsidiary of Delek Group for $965m.

US exploration company Anadarko Petroleum is the operator of the field, with an operating interest of 33.75%. Delek Group will join Equinor (23.5%) and Chevron (20.25%) as partners in the oilfield.

The Caesar-Tonga oilfield is located 300km south of Louisiana, US, at a depth of 1,500m and contains eight wells connected by an undersea pipeline network. It has a production horizon spanning ten years and production from the field started in 2012.

The oilfield is one of the ten largest deepwater resources in the Gulf of Mexico, with a current gross production rate of 71,000 barrels of oil equivalent per day (boepd). The field is expected to operate for 30 more years, and Delek Group’s purchase represents reserves of 78 million barrels of oil equivalent (Mboe) assuming no changes in production rate.

Shell upstream director Andy Brown said: “This transaction represents our continued focus on strategically positioning our deep-water business for growth and is consistent with our upstream strategy of pursuing competitive projects that deliver value in the 2020s and beyond.

“The sale will contribute to Shell’s ongoing divestment programme and allow us to direct resources to the areas where we see the most value in the longer term.”

Delek Group president and CEO Asaf Bartfeld said: “The transaction for acquisition of the rights in the Caesar Tonga field is a further important stage in implementing Delek Group’s strategy to expand and establish our operations on the international stage.

“This is a strategic opportunity, which provides the group access to a producing oil asset with significant proven reserves, with a strong cash flow and partnership with leading players in the global energy market.

“This activity, alongside the oil and gas exploration activity we are carrying out in the North Sea and the Gulf of Mexico, gives added emphasis to the Group’s position in the international energy market.”

The transaction is expected to close by the end of the third quarter (Q3) of 2019 with an effective date of 1 January 2019, subject to conditions including regulatory approvals.