Shell set to sell majority of North Sea assets to Chrysaor for $3 billion

Energy - Himanshu Gill - Jan 28,2017

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shell set to sell majority of north sea assets to chrysaor for 3 billion

Global oil major Royal Dutch Shell is nearing the deal to sell a major part of its North Sea oil and gas operations to private equity-backed oil firm Chrysaor for $3 billion.

This will be Shell’s first major exit from the North Sea basin in over 45 years. The deal is even lesser than half of the Anglo-Dutch company’s North Sea assets but will help its drive to sell-off $30 billion worth of assets from its global portfolio by 2019, amid rising economical pressure.

Chrysaor is an independent oil company with its presence only in the North Sea and is backed by private equity fund EIG Partners. It will take over Shell’s older fields, new developments and infrastructure in the region in a deal that could revive oil generation in one of the world’s oldest offshore basins where production has declined steadily since the late 1990s.

Shell has been mounted with pressure since its $54 billion acquisition of UK-based BG Group in 2015. The deal with Chrysaor has been in the making for the last few months, with previous reports valuing the assets of Shell at $2 billion.

Notably, oil and gas assets in the North Sea are reportedly matured with not many resources left for extraction.

Ben van Beurden, Shell’s chief executive, has already said that the company is preparing to withdraw from as many as 10 countries for raising funds. This is Shell’s second sale of assets in this month as it earlier sold its 50 percent stake in a Saudi Arabian petrochemicals business to raise $820 million.

Market analysts have said that the Chrysaor deal would take Shell’s total asset sales to almost $10 billion, just a few months into the second year of its sales and will put Shell ahead of its own disposal schedule.