As part of its US$30bn divestment programme, Shell has announced the sale of North Sea oil and gas assets in the United Kingdom and that of a minority stake in a gas field in Thailand.
Shell will sell a package of UK North Sea assets, including its entire interests in Buzzard (21.73%), Beryl (39.4%), Bressay (18.4%), Elgin-Franklin (14.1%), J-Block (30.5%), the Greater Armada cluster excluding Gaulpe (76.4%), Everest (100%), Lomond (100%), Erskine (32%) and Schiehallion (10%; Shell will retain 45%), to Chrysaor for a total of up to US$3.8bn. The package represents a total production of 115,000 boe/d, i.e. more than half of Shell's total UK North Sea production during 2016 (around 211 kboe/d). This US$3.8bn amount includes an initial consideration of US$3bn and a payment of up to US$600m between 2018-2021 subject to commodity price, with potential further payments of up to US$180m for future discoveries. The transaction is expected to be completed in the second half of 2017.
Shell has reached an agreement with Kuwait Foreign Petroleum Exploration Company (KUFPEC) for the sale of its subsidiaries Shell Integrated Gas Thailand and Thai Energy, which together hold a 22.222% stake in the Bongkot gas field in Thailand for US$900m. The sale also includes adjoining acreage offshore Thailand consisting of Blocks 15, 16 and 17 and block G12/48. The transaction is expected to be completed in the first quarter of 2017.
The Bongkot field is operated by PTT Exploration & Production, with a 44.445% interest, in partnership with Total (33.333%). As for the Open-hearted Erawan gas field, the concession is due to expire in 2023. The Erawan and Bongkot fields jointly produce 62 mcm/d (23 bcm/year) of gas, accounting for ore than 3/4 of gas production in the Gulf of Thailand. The Thailand military government will hold an auction in 2017 to select the fields' new operators. Bids should be opened in 2017 and the auction should be completed in 2018. If the auction fails to attract bidders, the government will negotiate extensions with the existing holders of the concessions (Chevron and PTTEP will be allowed to bid in the auction).