Economy

Shell completes $3.8bn sale of North Sea assets to Chrysaor

In the first half of 2017, deals worth nearly $6 billion were sealed in the North Sea oil industry, the Oil & Gas Authority said in its Economic Report 2017, noting that these and future acquisitions serve as a sign of the industry's gradual improvement and are a much-needed source of new investment that will ensure future production in the region.

Shell's share price has been steady in London in today's session, having added 0.17 percent to 2,369.50p as of 14:32 BST, slightly underperforming the benchmark FTSE 100 index which now stands 0.26 percent higher at 7,512.22 points.

Chrysaor will begin drilling in the North Sea in 2018 following its $3.8 billion purchase from Royal Dutch Shell, the company's chairman Linda Cook said Wednesday, according to Reuters.

The FTSE 100 group has been looking to divest $30 billion of assets in an effort to shore up its balance sheet in the wake of BG Group's acquisition.

Those assets included interests in Beryl, Bressay, Buzzard, Elgin-Franklin, Erskine, Everest, the Greater Armada cluster, J Block, Lomond and Schiehallion.

As part of the sale, 253 staff transferred from Shell to Chrysaor.

Simon Henry, Shell's chief financial officer, said: "This deal shows the clear momentum behind Shell's global, value-driven $30bn divestment programme".

The deal represents about half of Shell's 2016 North Sea output.

Chrysaor, led by Chief Executive Phil Kirk, would also consider an initial public offering but not in the next 12 months, she added. "I am excited at the prospect of our highly professional existing and new staff working together with our new licence and supply chain partners to develop and grow the company together. Safe and efficient operation of the assets is our primary objective as we pursue our development plans", he said.

The North Sea, one of the world's oldest offshore basins that started production in the 1960, remained attractive despite dwindling reserves due to an abundance of infrastructure and services, alongside favourable fiscal terms offered by the British government, Cook said. "Through its acquisition of the Shell portfolio Chrysaor is now firmly placed to take advantage of this change". Off-topic, inappropriate or insulting comments will be removed.



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