Shell, through its affiliate Shell Overseas, has signed a $1.9bn deal to sell its shares in Danish upstream assets to Norwegian Energy Company (Noreco).
The transaction, which is part of Shell’s divestment programme, comprises a 100% stake in Shell Olie-og Gasudvinding Danmark (SOGU), which holds a 36.8% non-operating interest in the Danish Underground Consortium (DUC).
The acquisition will see the addition of 67,000 barrels of oil equivalent per day (boepd) of production to Noreco’s portfolio.
Shell Upstream director Andy Brown said: ‘’Today’s announcement is consistent with Shell’s strategy to simplify its portfolio through a $30bn divestment programme, and contributes to our goal of reshaping the company into a world-class investment case.’’
In December last year, Shell, along with its DUC partners, decided to redevelop the Tyra gas field offshore Denmark, at an aggregate cost of $3.25bn. The redevelopment will increase the life of the field and enhance production to more than 200 million barrels of oil equivalent.
Under the terms of the deal, Noreco will assume all of Shell’s existing commitments and obligations, including the Tyra field redevelopment, as well as the decommissioning expenditures related to the Danish upstream assets.
Even after the transaction is closed, Shell Trading and Supply and Shell Energy Europe will retain rights to lift oil and gas lifting from the SOGU assets. However, the time period of the validity of these rights has not been disclosed.
Shell Country chairperson Lee Hodder said: “The DUC continues to provide material tax revenues, jobs and energy security to Denmark, and the Tyra redevelopment will ensure that this will be the case for decades to come.”
Subject to the receipt of regulatory approval, the closure of the transaction is anticipated to occur next year.
Despite the sale, Shell will continue to operate in Denmark through Dansk Shell, which comprises the Fredericia refinery.