Royal Dutch Shell Plc. (Shell) reached an agreement with publicly listed Norwegian Energy Company ASA (Noreco) to sell shares in its Danish subsidiary Shell Olie-og Gasudvinding Danmark B.V. (SOGU) for $1.9 billion, the energy giant announced Wednesday.
The agreement was reached through affiliate Shell Overseas Holdings Limited with Altinex AS, a Noreco subsidiary, according to a statement from the company.
SOGU is a wholly-owned Shell subsidiary that holds a 36.8 percent non-operating interest in the Danish Underground Consortium (DUC), which operates 15 fields in the Danish North Sea. The transaction includes a 100 percent interest in Shell Olie-Og Gasudvinding Denmark Pipelines ApS (SOGUP) held by SOGU.
SOGUP owns a share interest in the Tyra West – F3 gas pipeline, a 100-kilometer-long natural gas pipeline connecting Danish and Dutch continental shelf pipeline systems.
Shell's Upstream Director Andy Brown said the announcement was consistent with the company's strategy to simplify its portfolio through a $30 billion divestment program.
The sale also contributes to Shell's goal of reshaping the company into a "world-class investment case", Brown added. As part of the agreement, Noreco will assume all of Shell's existing commitments and obligations, including the Tyra natural gas field redevelopment and the decommissioning costs associated with the assets.
The sale represents production of some 67,000 barrels of oil equivalent per day (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.
According to the statement, the transaction is a share sale, which means upon completion, local SOGU staff primarily dedicated to DUC will continue to be employed by their current entity, which Noreco will own on completion.
"Following completion, Shell will retain a downstream presence in Denmark through A/S Dansk Shell, which includes the Fredericia refinery," the company said, adding it would continue to evaluate options to grow new business in Denmark if relevant opportunities presented themselves.
The sale is subject to regulatory approval and is expected for completion in 2019. The transaction’s effective date is Jan. 1, 2017.
(Anadolu Agency)
