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Shell takes cash offer for Gulf of Mexico assets

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By Daniel J. Graeber: Aug 30, 2016

HOUSTON, Aug. 30 (UPI) — In a deal that included $425 million in cash, Royal Dutch Shell said it sold off its entire stake in assets held in the U.S. waters of the Gulf of Mexico.

Shell said the sale of the 100 percent stake of three blocks known collectively as the Brutus/Glider assets to EnVen Energy Corp. was in line with the company’s divestment strategy. In July, the company’s chief executive officer, Ben van Buerden, said “significant and lasting changes” were underway as lower crude oil prices continued to present problems for the industry.

Moving through the year after its mega-merger with British energy company BG Group, the company reported its net income during the second quarter fell more than 70 percent to $1.18 billion. Shell this year has moved away from other North American projects apart from the Gulf of Mexico decision, saying in July that capital constraints were in part behind a decision to delay a final investment decision for a gas export facility in Canada.

This year, the company said it was leaving oil and gas operations in as many as 10 countries, while focusing more heavily on gas-rich Australia and shale opportunities in the United States.

Shell said it maintained a strong portfolio of assets in the Gulf of Mexico and plans are to increase output from established reservoirs. The Brutus/Glider assets combine for about 25,000 barrels of oil equivalent in production per day, or less than 5 percent of its total output.

Shell this year closed down production briefly after observing sheen in the region. More than 2,000 barrels of oil were released into the U.S. waters of the Gulf of Mexico about 97 miles from the southern tip of Louisiana from operations the company’s Glider oil field.

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