another payment of up to $180 million if certain exploration
milestones are met.
Shell had said in 2016 that it wanted to sell $6-8 billion
although it fell short of its goal. The deals announced Jan. 31
mean that Shell now reached negotiated transactions worth
about $11 billion.
The North Sea sale is the largest deal yet in Shell’s divestment program.
Shell is selling upstream, downstream, and midstream assets to help pay down debt after its 2016 acquisition of BG
Group PLC last year. Shell reported $78 billion in debt as of
KUFPEC Thailand Holdings Pte. Ltd. agreed to buy a stake
in Bongkot field from Shell Integrated Gas Thailand and
Thai Energy Co. Ltd., which together hold 22.2% stake in
Bongkot and adjoining acreage offshore Thailand consisting
of Blocks 15, 16, and 17, and Block G12-48.
PTT Exploration & Production operates Bongkot with
44.445% interest. Total SA has 33.3% interest.
“This transaction shows the clear momentum behind
Shell’s global, value-driven $30-billion divestment program,”
Shell said. The transaction is expected to be completed during
the first quarter.
Shell said the announcement had no impact on its other
Upstream Technology Editor
Royal Dutch Shell PLC announced a series of transactions
involving the sale of oil and gas assets in the UK North Sea
and Thailand worth a total of nearly $5 billion.
Shell is selling much of its UK North Sea assets for $3.8
billion to Chrysaor Holdings Ltd., an oil company backed by
Harbour Energy Ltd., the investment branch of EIG Global
Energy Partners in Washington, DC.
Separately, Shell also announced the sale of its interest in a
Thailand gas field to state-owned Kuwait Foreign Petroleum
Exploration Co. for $900 million.
Chrysaor is acquiring a package of North Sea and natural
gas assets from Shell UK Ltd. Assets include Shell’s interests
in 10 operated and nonoperated fields, associated infrastructure, and midstream assets. Collectively, the assets produced
115,000 boed in 2016.
Chrysaor expects closing in the second half. Some 400
Shell employees work on the assets being acquired. The transaction would make Chrysaor one of the largest UK oil and
gas producers. Chrysaor executives said they plan drilling to
extend the life of fields it will operate.
Terms call for Chrysaor to pay $3 billion upfront and another $600 million during 2018-21 subject to oil prices. Shell
agreed to repay up to $100 million to Chrysaor if oil prices
fall below a certain level. Terms also call for Shell to receive
Chevron Corp. reported fourth-quarter 2016 earnings of
$415 million compared with a loss of $588 million in fourth-quarter 2015. Full-year 2016 results were a loss of $497 million compared with earnings of $4.6 billion in 2015.
“Our 2016 earnings reflect the low oil and gas prices we
saw during the year,” said John Watson, Chevron chairman
and chief executive officer. “We responded aggressively to
those conditions, cutting capital and operating expenses by
$14 billion. We are well positioned to improve earnings and
be cash flow balanced in 2017 through continued tight spend-
ing and cost control and additional revenue from expected
The company added 900 million boe of proved reserves in
2016. The additions, which are subject to final reviews, equate
to 95% of net oil-equivalent production for the year. The larg-
est additions were from the Future Growth project at Ten-
gizchevroil in Kazakhstan, the Permian basin in the US, and
the Wheatstone project in Australia.
Worldwide net oil-equivalent production in the fourth
Shell selling some North Sea assets, Thailand field
Chevron reports $415 million in 4Q 2016 earnings
quarter was 2.67 million b/d, essentially unchanged from a
year earlier. Production increases from major capital projects
and base business were offset by normal field declines, the
impact of asset sales, production entitlement effects in several
locations, and the effects of civil unrest in Nigeria.
Net oil-equivalent production for the full year was 2.59
million b/d, a decrease of 1% from the prior year. Production
increases from major capital projects, shale and tight properties, and base business were more than offset by normal field
declines, the impact of asset sales, the partitioned zone shut-in, the effects of civil unrest in Nigeria, and planned turnaround activity.
US upstream operations in the fourth quarter earned $121
million compared with a loss of $1.95 billion a year earlier.
The increase was primarily due to lower depreciation, exploration and operating expenses, and higher crude oil and natural gas realizations.
International upstream operations in the quarter earned
$809 million, up from $593 million a year earlier. The in-