Published: Aug 07, 2007
SHELL has sold its stake in the Norwegian Sea’s largest new oilfield project for five years to German energy group E.ON Ruhrgas for $893m, writes Martyn Wingrove.
E.ON will be getting a 28% stake in the NKr31bn ($5.3bn) Skarv and Idun project, boosting its position in the Norwegian Sea.
Shell, one of Europe’s two largest oil companies, said it would focus its investments on more near term projects such as Ormen Lange, which is due on stream by November.
‘The divestment of Skarv and Idun is part of the active management of Shell’s portfolio-based strategy,’ said David Loughman, managing director of Norske Shell.
British oil firm BP plans to develop the two fields with subsea wells tied back to a newbuild floating production storage and offloading vessel with first oil by the end of 2011.
BP has submitted development applications to the Norwegian government and is hoping to receive approvals before the end of this year.
A large production vessel will be installed in around 400 m of water and a new 80 km pipeline will link the FPSO to the Asgard Transport System to export the gas to Europe.
E.ON has purchased Shell’s 28% interest to secure access to some of the area’s gas resources to feed growing German markets.
Both fields hold combined reserves of 16.8m cu m of liquid hydrocarbons and 48.3bn cu m of gas. There is also more reserves to be recovered in later phases of the Skarv project.
Mr Loughman said Norske Shell is investing in other fields and projects in Norway instead of funding its share of the Skarv development.
‘Ormen Lange is very important in our growth strategy,’ he said. ‘We are investing to increase output from the Draugen asset, the development of Gjoa and further development of Statfjord, Troll, Kvitebjorn and Valhall assets.’
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