For Shell, selling the Permian assets will leave its U.S. oil and gas production almost entirely in the offshore Gulf of Mexico, where it is the largest single producer. It sold its Appalachian gas assets last year.

The sale was announced on the same day Shell disclosed damage to offshore transfer facilities from Hurricane Ida will cut production from the area into early next year.

BIDEN ADMINISTRATION MOVES TO PROTECT BIRD SPECIES IN OIL-RICH PERMIAN BASIN

“We have had a once in a 20-30 year storm that has been impactful, but we continue to believe this is a very valuable position,” Wael Sawan, the company’s director of upstream, told Reuters.

Sawan said the company would continue to invest in its top oil and gas assets globally, and while it had looked at options which would have retained and boosted its Permian acreage in recent years, it was decided the position did not have sufficient scale for Shell to continue to operate it.

“This sale came up for us as a very compelling value proposition,” Sawan said.

U.S. will continue to account for around one-third of Shell’s global spending, as it focuses on its Gulf position as well as petrochemicals and renewables.

Shell will return $7 billion of the proceeds to shareholders as dividends on top of existing commitments, with the rest going to pay down debt, it said. Conoco also announced it would increase quarterly cash payments to shareholders by 7% from Dec. 1.

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Reuters first reported in June that Shell had put up for sale its assets in the Permian, the shale formation stretching across Texas and New Mexico that accounts for around 40% of U.S. oil production.

Morgan Stanley and Tudor, Pickering, Holt & Co advised Shell, with Goldman Sachs supporting ConocoPhillips. Legal advice for the seller and buyer came from Norton Rose Fulbright and Baker Botts respectively.