International energy titan Royal Dutch Shell is to sell its InterGen power plant business for close to $2 billion to an investor partnership made up of insurance giant AIG and Ontario Teachers' Pension Plan.

Shell and minority shareholder Bechtel are selling InterGen and ten power plants in the UK, the Netherlands, Mexico, the Philippines, China and Australia, for $1.75 billion.

The deal reflects the current trend in the energy sector for retreating back to core operation. As with many other oil-focused companies, Shell will look to redirect its cash from such areas as power generation back to its oil operations, which have taken a battering of late as errors in oil reserve accounting and a poor replacement ratio have dented shareholder confidence.

However, the Shell/Bechtel partnership has not divested all of its power production assets; the companies said in a statement that they are retaining seven facilities in the US, Columbia and Turkey.

AIG’s private equity division and Ontario Teachers’ will finance the acquisition equally.