British oil major Shell, through its affiliate Shell Overseas Holdings Limited, has reached an agreement with publicly listed Norwegian Energy Company ASA (Noreco), to sell its shares in Shell Olie-og Gasudvinding Danmark B.V. (SOGU) for a consideration amount of $1.9 billion.
SOGU is a wholly-owned Shell subsidiary that holds a 36.8% non-operating interest in the Danish Underground Consortium (DUC). The sale is subject to regulatory approval and expected to be completed in 2019. The transaction’s effective date is 1 January 2017.
As part of the agreement, Noreco will assume all of Shell’s existing commitments and obligations, including the Tyra redevelopment and the decommissioning costs associated with the assets.
Today’s announcement is consistent with Shell’s strategy to simplify its portfolio through a $30 billion divestment programme, and contributes to our goal of reshaping the company into a world class investment case,
…said Andy Brown, Shell’s Upstream Director.
The sale represents production of some 67,000 boe/d (Shell share) in 2017. Under the agreement, Shell Trading and Supply and Shell Energy Europe Limited will continue to have oil and gas lifting rights from the SOGU assets for a period after completion.
The transaction is a share sale which means that, upon completion, local SOGU staff primarily dedicated to DUC will continue to be employed by their current entity, which will be owned by Noreco at completion.
This transaction has no direct impact on Shell’s other businesses in Denmark. Following completion, Shell will retain a Downstream presence in Denmark through A/S Dansk Shell, which includes the Fredericia refinery.
The network of Shell-branded retail stations in Denmark continues to be operated by DCC. Shell will continue to evaluate options to grow new business in Denmark if relevant opportunities present themselves.
This follows a respective move by American oil major Chevron which also recently agreed to sell its small stake in DUC to French Total, in a bid to wind down its North Sea activity.
