Shell Sells Draugen, Gjøa Interest in Norway

Royal Dutch Shell plc, through its affiliate A/S Norske Shell, has reached an agreement with OKEA AS to sell its entire 44.56% interest in Draugen and 12.00% interest in Gjøa in Norway for $556 million (NOK 4,520 million).

The transaction is subject to regulatory approval and is expected to complete in fourth-quarter 2018. The transaction’s expected effective date is Jan. 1, 2018. Upon completion OKEA will become the new operator of Draugen.

The decommissioning costs associated with the assets are currently estimated to be $120 million after-tax (NOK 1,000 million); Shell will retain 80% of this liability up to an agreed cap and OKEA will assume the remaining liability.

The Shell share of the assets’ production amounted to approximately 25,000 boed in 2017, representing about 14% of Shell’s Norwegian production in 2017.

“This deal is part of Shell’s global, value-driven $30-billion divestment program and is consistent with our strategy to high-grade and simplify our portfolio”, said Andy Brown, Shell’s upstream director. “Shell has a long and proud history in Norway. We continue to have strategic, long-term positions in Troll and Ormen Lange and are actively seeking new growth opportunities.”

On completion, Draugen staff onshore and offshore are expected to transfer to OKEA with full continuity of service.

Source: www.worldoil.com