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Shell sell-off heralds ‘generational change’ in North Sea dawn

By DAVID SHANDPUBLISHED: 00:01, Wed, Feb 1, 2017

A “GENERATIONAL change” in North Sea oil and gas production was signalled yesterday after Shell sold a large chunk to private equity-backed exploration group Chrysaor in a £3billion deal.

The sale is part of Shell’s plans to dispose of £24billion of assets by 2018 to reduce its debts following its £35billion takeover of BG Group last year. 

Major producers like Shell are also withdrawing from the North Sea to focus on higher profit areas such as Brazil. 

The assets, which produced 115,000 barrels of oil daily last year, will make Chrysaor the UK’s leading independent North Sea-focused oil and gas company. 

It intends to grow the assets and has identified opportunities to extend the life of the fields. 

When the deal completes in the second half of this year, about 400 staff are expected to transfer to Chrysaor on existing terms and conditions. 

Shell’s upstream director Andy Brown hailed the deal a “vote of confidence in the UK North Sea”. 

Linda Cook, a Shell veteran of 29 years who at one time was seen as a potential contender for the role of chief executive of the FTSE 100 group, has joined as Chrysaor chairman. 

She said: “The North Sea has undergone a revolution in recent times with operating costs falling to competitive economic levels, and this signals a moment for a generational change in the basin.” 

Chrysaor’s chief executive Phil Kirk added: “The UK North Sea has material future potential for oil and gas production. 

“We intend to create a UK champion, with the skills and resources of a major independent oil and gas company, to help ensure the basin’s future potential is realised safely, profitably and in alignment with the Government’s policy of driving investment and maximising economic recovery.” 

UK offshore industry organisation, Oil & Gas UK, said the potential new activity would be “good for the sector’s supply chain across the UK, which has been severely hit by the downturn.”


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