UK-based Chrysaor has signed an agreement to acquire a package of UK North Sea oil and gas assets from Shell for $3.8bn.
As part the agreement, Chrysaor will acquire Shell’s interest in Buzzard (21.73%), Beryl (39.4%), Bressay (18.4%), Elgin-Franklin (14.1%), J-Block (30.5%), the Greater Armada cluster excluding Gaulpe (76.4%), Everest (100%), Lomond (100%), Erskine (32%) and Schiehallion (10%).
Subject to regulatory and partner consents, the deal is expected to complete in the second half of 2017.
Chrysaor CEO Phil Kirk said: “Chrysaor is acquiring a high quality package of assets which combine low cost production, a substantial reserves and resources base with strong cash flows and a highly competent and skilled workforce.
“We intend to create a UK champion, with the skills and resources of a major independent oil and gas company, to help ensure that the basin’s future potential is realized safely, profitably and in alignment with the Government’s policy of driving investment and maximizing economic recovery.”
Chrysaor expects the acquisition to position it as one of the UK’s leading independent oil & gas company focused on the North Sea.
The sale is part of Shell’s $30bn divestment program and efforts to improve its competitiveness in the UK upstream business.
Shell said that the deal contributes to the UK’s goal to maximize economic recovery of oil and gas from the North Sea.
Shell CFO Simon Henry said: “The deal is consistent with Shell’s strategy to high-grade and simplify our portfolio following the acquisition of BG, to ensure the company represents a world-class investment case.”
Upon completion of the deal, around 400 employees from Shell will be transferred to Chrysaor.
Image: Chrysaor intends to boost its offshore oil and gas business in the UK. Photo: courtesy of num_skyman/FreeDigitalPhotos.net.