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Shell to sell Danish upstream assets to Noreco for $1.9B


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Essential Energy Insights - November 2021


European Energy Insights October 2021

Shell to sell Danish upstream assets to Noreco for $1.9B

Inching closer to completing its plan to divest $30 billion in assets by year's end, Royal Dutch Shell PLC said Oct. 17 it inked a deal to sell its shares in Shell Olie-OG Gasudvinding Danmark BV to Norwegian Energy Co. ASA for $1.9 billion.

The sale, which is expected to be completed in 2019, represents production of about 67,000 barrels of oil per day in 2017. As part of the agreement, Noreco will assume all of Shell's existing commitments and obligations, including the Tyra redevelopment and the decommissioning costs associated with the assets.

"Today's announcement is consistent with Shell's strategy to simplify its portfolio through a $30 billion divestment program, and contributes to our goal of reshaping the company into a world class investment case," Shell's Upstream Director Andy Brown said.

Under the agreement, Shell Trading and Supply and Shell Energy Europe Ltd will continue to have oil and gas lifting rights from the Shell Olie-OG assets for a period after completion.

The Danish company is a wholly-owned Shell subsidiary that holds a 36.8% non-operating interest in the Danish Underground Consortium, or DUC. The consortium operates 15 fields in the central Graben sector of the North Sea and covers nearly 90% of the Danish oil and gas production with an average 182,000 barrels of oil equivalent per day in 2017.

Shell plans to retain a downstream presence in Denmark through A/S Dansk Shell, which includes the Fredericia refinery.

At the end of the July, Shell said it had completed $27 billion of divestments, leaving the company well on track to reach its goal of $30 billion by the end of the year.