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Shell completes North Sea sale, creates new basin heavyweight

Shell this morning finalised its $3.8billion North Sea deal with Harbour Energy-backed Chrysaor Holdings.

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The package of assets consists of Shell’s interests in Buzzard, Beryl, Bressay, Elgin-Franklin, J-Area, the Greater Armada cluster, Everest, Lomond and Erskine, plus a 10% stake in Schiehallion. The deal includes an initial consideration of $3billion and a payment of up to $600m between 2018-2021 subject to commodity price, with potential further payments of up to $180m for future discoveries.

The transaction was backed by private equity fund EIG Global Energy Partners, through its Harbour Energy joint venture with Asian commodity group Noble. Through the acquisition, Chrysaor becomes the leading independent oil and gas company in the UK North Sea.

In Q4 2017, Shell will record an accounting gain on sale of $1.0bn against the values of both the Shell and former BG assets included in the package.

The multi-billion dollar deal represents significant headway in Shell’s $30billion divestment target.

A Shell spokeswoman said: “Shell retains a significant, more focused and strengthened presence in the UK North Sea, to which it remains committed.”

Shell chief executive Ben Van Beurden previously sat down with Energy Voice to dispel any myths of a North Sea treat and revealed plans to spend up to $1billion a year in the basin. Read more here.

He also cautioned the North Sea must “earn its right to grow”.

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