The Hague-based LNG giant Shell is selling its upstream interests in Denmark for $1.9 billion.
Shell Overseas Holdings Limited, a unit of Shell, has reached an agreement with publicly listed Norwegian Energy Company ASA (Noreco) to sell its shares in Shell Olie-og Gasudvinding Danmark (SOGU).
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, according to a Shell statement on Wednesday.
Andy Brown, Shell’s Upstream Director, said: ‘’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.’’
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.
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, the statement said.