U.S. oil major Chevron Corp. will formally exit the Norwegian continental shelf, or NCS, following the transfer of its stake in an exploration license, Reuters reported Oct. 10 citing a Norwegian government letter.

The letter, obtained by Reuters, dated Sept. 28 from the Norwegian oil and energy ministry said that Chevron agreed to transfer its 20% stake in production license, or PL 859, to DNO ASA.

"Chevron Norway shuts down its activities in Norway and leaves the NCS permanently," the ministry said in the letter.

The ministry noted that it agreed on the transfer provided that Chevron covered its share of the decommissioning costs at the Draugen oilfield in the Norwegian Sea.

Speaking to Reuters, a Chevron spokeswoman said the oil major reached a deal in July with DNO for an undisclosed value.

"The transaction is subject to certain conditions and approvals, and is expected to take a number of months to close," the spokeswoman said.

PL859 is located in the Barents Sea and is operated by Equinor Energy AS with a 30% stake along with Chevron Norge AS, Petoro AS, Lundin Norway AS and ConocoPhillips Skandinavia AS with interests of 20%, 20%, 15% and 15%, respectively.