Oil giant Shell has decided to sell its onshore assets in Gabon to Assala Energy, a Carlyle Group company, for $587 million in a move to partly make up for the $50 billion acquisition of BG Group last year.
The sale, subject to certain approval and conditions, is expected to be closed in mid-2017.
Carlyle will also assume a debt of $285 million as part of the transaction. It will make additional payments up to a maximum of US$150 million depending on production performance and commodity prices.
This transaction consists of all of Shell’s onshore oil and gas operations and related infrastructure in Gabon: five operated fields as well as the associated infrastructure of the onshore pipeline system from Rabi to Gamba and the Gamba Southern export terminal.
Shell onshore in Gabon produced approximately forty-one thousand barrels of oil equivalent per day in 2016 and Shell Trading (STASCO) will continue to have lifting rights from the assets for the coming 5 years.
Andy Brown, Shell’s Upstream Director, said: “Shell is very proud of the strong legacy we have built in Gabon over the past 55 years.
What about offshore?
The decision to divest was not taken lightly, but it is consistent with Shell’s strategy to concentrate our Upstream footprint where we can be most competitive. Shell will continue to pursue opportunities in Sub Saharan Africa.”
He then added, “Together with recent divestments in the UK, Gulf of Mexico and Canada, this transaction shows the clear momentum behind Shell’s $30bn divestment programme, and it helps us to high-grade and simplify our upstream portfolio following the acquisition of BG.”
As a result of the sale some 430 local Shell employees will become part of Assala Energy at completion.
The sale does not mean Shell is exiting Gabon, as its offshore acreage is not part of the deal, at least not for now.
To remind, in late 2014, Shell made a gas discovery at its Leopard well in the pre-salt layer offshore Gabon. At the time, Shell said the discovery made in license BCD10 was a play-opener with a multi-TCF potential.
A Shell spokesperson told the Daily Mail the company would be keeping its two offshore blocks in Gabon.
However, a website named Gas Strategies, has a brief article titled “Shell mulls Gabon offshore gas field divestment after offloading onshore assets,” in which it claims, based on a tip of a “well-placed source”, that Shell is looking to divest its offshore assets there as well.
Shell holds exploration licenses for two blocks BC9 and BCD10, located 50 to 200 km west of Gabon in water depths ranging from 100 to 4,000 meters.
A source with close knowledge of the matter confirmed to Offshore Energy Today that Shell will be retaining the Gabon offshore blocks for the time being, but they wouldn’t rule out a sale should the right opportunity arise.
Offshore Energy Today Staff