Royal Dutch Shell Group .com Rotating Header Image

Shell offloads North Sea assets as price slump bites

Screen Shot 2015-10-13 at 12.15.22

Screen Shot 2015-10-13 at 12.16.08

Screen Shot 2015-09-17 at 07.55.40Published at 12:01AM, October 13 2015

Royal Dutch Shell is selling two assets in the North Sea as the big energy companies respond to high production costs and a slump in crude prices by turning their backs on the basin.

Shell’s stake in the Gannet field, a complex of ageing oil production platforms and pipelines 110 miles east of Aberdeen, is being marketed to potential buyers, industry sources told The Times. The Anglo-Dutch group is also looking to sell off its 26 per cent stake in Triton… (FULL ARTICLE)

RELATED: Shell share price: Oil Major reducing North Sea exposure

Screen Shot 2015-10-13 at 12.21.31

by Veselin ValchevTuesday, 13 Oct 2015

Royal Dutch Shell Plc (LON:RDSA) has begun marketing two stakes in the North Sea as the firm seeks to cut exposure to less efficient production amid the oil price crunch, The Times reported today, citing sources close to the company.

The Anglo-Dutch oil major has put up for sale its 50 percent stake in the Gannet field, a complex of platforms and pipelines with export capacity of 88,000 barrels of crude oil and 246 million standard cubic feet of gas per day. However, actual output is thought to be less than 13,500 bpd.

The Hague-based company is also looking for buyers for its 26 percent stake in Triton, a floating production, storage and offloading vessel operated by Dana Petroleum, the sources said.

Shell declined to comment on the sales, but its chief executive Ben van Beurden said in an interview last week that, while Shell was withdrawing from some areas of the North Sea, it was continuing to invest in others, including emerging gas-producing areas west of the Shetland Islands.

“Every basin that runs for a long period of time will need to rejuvenate and [we will need to] shed less resilient positions and reinvest into fresher assets.”

The depressed oil price has prompted exploration companies to wind down exploration spending and cut inefficient production. Shell pulled the plug on its $7 billion Arctic exploration campaign last month, while in August the firm sold its stake in a cluster of North Sea assets to two Malaysian companies for a total of $105 million.

“This deal fits with Shell’s strategy to deliver strong shareholder value across our assets,” a Shell spokesman said at the time. “The Anasuria cluster has entered a phase where it offers greater value to other companies than it does for Shell.”

The North Sea in particular has been severely hit by the adverse market conditions, as its aging wells struggle to remain profitable.

Rival oil major BP, however, has pledged to invest £670 million in upgrading equipment in the North Sea, with the goal of extending the lifespan of some of its assets “until 2030 and beyond”.

“These are challenging times for the industry and we are having to make hard choices,” BP’s regional president Trevor Garlick said at the time. “Nonetheless, we remain committed to improving the competitiveness of the North Sea and to maximising economic recovery from our fields.”

Shell’s share price dropped 1.1 percent yesterday to close at 1,791.50p. The company’s stock climbed some seven percent last week and is hovering near a two-month peak.

SOURCE

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

Comments are closed.

%d bloggers like this: