Shell sell Draugen, Gjoa interests Okea $556 mn

Shell to sell Draugen, Gjoa interests to Okea for $556 mn

5:13 AM, 21st June 2018
Logo of the company Shell seen at a retail site in US. (File photo)
Logo of the company Shell seen at a retail site in US. (File photo)

THE HAGUE, NETHERLANDS: Royal Dutch Shell plc, through its affiliate A/S Norske Shell, has reached an agreement with Okea AS to sell its entire 44.56 percent interest in Draugen and 12.00 percent interest in Gjoa in Norway for $556 million (NOK 4,520 million).

The transaction is expected to complete in Q4 2018.  The transaction’s expected effective date is 1 January 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 percent 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 kboe/d in 2017, representing about 14 percent of Shell’s Norwegian production in 2017.

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

“This deal is part of Shell’s global, value-driven $30bn divestment programme and is consistent with our strategy to high-grade and simplify our portfolio. 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,” said Andy Brown, Shell’s upstream director.

“We are happy that Okea’s ambition is to uphold and strengthen Draugen’s footprint in mid-Norway. They will also be welcoming transferring staff in Kristiansund and Stavanger in order to leverage their substantial experience and competence for the safe and efficient operation of Draugen in the future. This deal is a good strategic move for both companies,” said Rich Denny, managing director of A/S Norske Shell.

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