Royal Dutch Shell has received the European Commission approval to sell Northern North Sea petroleum operations to British oil and gas company Chrysaor for $3.8bn.
The target assets consist of Shell's Northern North Sea asset portfolio, which includes Beryl (39.4%), Bressay (18.4%), Buzzard (21.73%), Elgin-Franklin (14.1%), Erskine (32%), Everest (100%), the Greater Armada cluster (76.4%), J Block (30.5), Lomond (100%) and Schiehallion (10%).
These assets produced 115,000 barrels of oil equivalent per day in 2016, according to Chrysaor.
The sale is a part of the Shell’s $30bn divestment program to reduce its debt following its acquisition of BG Group for $54bn in 2016, and improve its competitiveness in the UK upstream business.
Chrysaor, backed by the US-based investment fund EIG Global Energy Partners, believes that the North Sea basin, which is roughly half way through its productive life, presents an opportunity to build a large scale and independent full-cycle exploration and production business.
Chrysaor aims to extend the production life of the assets through enhanced recovery techniques, in-fill exploration on and around the acquired acreage, fallow field development, and bolt-on acquisitions.
The transaction is expected to add proven and probable reserves of around 350 million barrels of oil equivalent to Chrysaor’s existing reserves base.
Approximately 400 staff will transfer to Chrysaor, bringing substantial experience in operating the assets.
"The Commission concluded that the proposed acquisition would raise no competition concerns given the very limited overlap between the companies' activities and the presence of strong competitors," the Commission said.