Royal Dutch Shell Sells Interest in Norway Oil Fields For $556 Million

Royal Dutch Shell (RDS.A) said on Wednesday that its affiliate A/S Norske Shell will sell its 45% interest in Draugen and 12% interest in Gjoa in Norway for $556 million in cash.

The company also will pay OKEA $46 million upon the latter completing decommissioning of the assets. Shell will retain 80% of the decommissioning liability of the assets up to an after-tax cap of $78 million, subject to CPI indexation. The transaction is subject to regulatory approval and is expected to complete in the fourth quarter.

Upon completion of the sale, OKEA will become the new operator of Draugen. Shell said it will shed the assets’ production, which accounted for about 17% of the company’s Norwegian production last year. The deal is part of Shell’s $30 billion divestment program and is consistent with its strategy to simplify its portfolio, said Andy Brown, the company’s upstream director.

“Shell has a long and proud history in Norway,” he said. “We continue to have strategic, long-term positions in Troll and Ormen Lange and are actively seeking new growth opportunities.”

Shell said it remains committed to Norway as it operates the Ormen Lange and Knarr assets and partners in the Troll, Valemon and Kvitebjorn facilities. The company’s also drilling to exploratory wells along the Norwegian continental shelf. A/S Norske Shell also is the technical service provider of the Nyhamna gas processing plant and is a partner in the full-scale CCS project and CCS test facility in Mongstad.

Shell also said affiliate Shell Gas Holdings has completed the sale of its 15% share of Malaysia LNG to Sarawak State Financial Secretary. The transaction was started on Sept. 1. The final consideration came in at about $640 million, the company said.

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