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Shell to divest upstream interests in Ireland

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Oilfield Technology,

Royal Dutch Shell plc (Shell), through its affiliate Shell Overseas Holdings Limited, has reached an agreement with CPP Investment Board Europe S.A.R.L., a wholly owned subsidiary of Canada Pension Plan Investment Board (CPPIB), to sell its shares in Shell E&P Ireland Limited, which holds 45% interest in the Corrib gas venture for up to US$1.23 billion (€1.08 billion).

The transaction includes an initial consideration of US$947 million (€830m), as well as additional payments of up to US$285 million (€250 million) between 2018 and 2025, subject to gas price and production.

The transaction, which represents Shell’s exit from the upstream business in Ireland, is subject to partner and regulatory consents and is expected to complete in 2Q18. The transaction’s effective date is 1 January 2017.

Shell’s share of the Corrib gas venture’s production represented approximately 27 000 boe/d in 2016.

Shell Energy Europe Limited has signed an offtake agreement for some 40% of the Corrib gas venture’s production for up to three years following completion.

CPPIB will be the new Corrib gas joint venture partner and Vermilion will become the new operator of the Corrib venture.

“This transaction is part of our strategy to reshape Shell and to deliver a world class investment case,” said Shell’s Upstream Director, Andy Brown. “It demonstrates the strong momentum behind our three-year US$30 billion divestment programme. At the half-way point, we have now announced deals valued at more than US$20 billion.”

“This transaction is consistent with Shell’s strategy to concentrate our Upstream footprint where we can add most value. I’m confident that Corrib will continue to deliver energy successfully to the people and businesses of Ireland.”

Ronan Deasy, Shell’s Country Chair in Ireland, said, “Shell is very proud to have led the development of the Corrib gas field. Since coming on-stream, the field and facilities have delivered exceptional performance. I would like to pay tribute to all those who have contributed to the development of this important energy project. In particular, I wish to acknowledge our staff, stakeholders and the local community who have worked closely with us over the years.”

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