Shell Integrated Gas Thailand and Thai Energy Company have agreed to sell a 22.22% stake in the Bongkot field and adjoining acreage in offshore Thailand to PTT Exploration & Production Public Company for $750m.
The deal is expected to be complete in the second quarter of 2018, and involves Shell’s equity in Blocks 15, 16 and 17 and Block G12/48.
After completion of this transaction, PTTEP’s equity in Bongkot will grow to 66.6667%, with the remaining stake owned by Total. Bongkot is operated by PTTEP.
Shell’s decision to sell is part of its strategy to sell non-core assets. This sale will enable Shell to take one step closer to its sale target of $30bn.
Meanwhile, Shell’s Mexican unit Exploración y Extracción de México has secured four exploration blocks on its own, one with its partner Pemex Exploración y Producción and four blocks with its partner Qatar Petroleum International Limited in the deepwater bid round for the Mexican Gulf of Mexico.
Shell will serve as the operator of all these nine offshore fields.
Shell upstream director Andy Brown said: “We commend Mexico on a historical, successful bid round; for Shell, today’s win marks a competitive, deepwater entry in Mexico.
“The proximity and technical similarity of this opportunity to our leading position in the US Gulf of Mexico will allow us to benefit from and build upon decades of experience, complementing our position in the region.”
Drilling operations for the Whale well were completed in June 2017 to a total measured depth of around 22,948ft. This discovery is located around 322km south-west of Houston in around 8,000ft of water.
Currently, evaluation of this discovery is being taken up and appraisal drilling is underway to define further development options.
Brown said: “Deepwater is an important growth priority as we reshape Shell into a world-class investment case.
“This announcement shows how, through exploration, we are sustaining a strong pipeline of discoveries and future projects to sustain this deepwater growth.”
Whale is operated by Shell, which owns 60% stake in the field and co-owned by Chevron USA with 40% interest. It was discovered in the Alaminos Canyon Block 772, next to the Shell-operated Silvertip field and around ten miles from the Shell-operated Perdido platform.
This find in a Shell heartland expands the company’s Paleogene exploration in the Perdido area. Through exploration, Royal Dutch Shell has added more than one billion barrels of oil equivalent resources in the Gulf of Mexico over ten years.
Currently, Shell currently has three Gulf of Mexico deepwater projects under construction, which are Appomattox, Kaikias, and Coulomb Phase 2. In addition, it has investment options for additional subsea tiebacks and Vito.
The group expects its deepwater production to exceed 900,000bpd of oil equivalent by 2020 from established fields.