Shell in £3 billion sale of North Sea assets

Giant pledges commitment to UK North Sea despite sale of interests and transfer of 400 jobs

Royal Dutch Shell is selling off a package of North Sea assets for up to $3.8 billion (£3bn) to smaller rival Chrysaor as it continues a divestment drive.

The oil giant’s interests in Buzzard, Beryl, Bressay, Elgin-Franklin, J-Block, the Greater Armada cluster, Everest, Lomond and Erskine – plus a 10% stake in Schiehallion – will all be offloaded as part of the deal.

Around 400 staff are expected to transfer to Chrysaor on their existing terms and conditions of employment.

Shell will pocket an initial $3bn (£2.4bn), followed by a payment of up to $600 million (£480m) between 20182021 subject to commodity prices, with potential further payments of up to $180m (£144m) for future discoveries.

The company has said that it would record an “accounting gain” on the sale.

The assets pump out a total of 115,000 barrels of oil per day. Shell’s total North Sea production last year was around 211,000 barrels per day.

Chrysaor, backed by private equity firm EIG, will become one of the largest producers of oil and gas in the UK.

Andy Brown, Shell’s upstream director, said: “Shell has a long and proud history in the UK North Sea, to which we remain committed.

“This deal complements the great strides we have made over the last two years in improving the competitiveness of our UK upstream business.

“We believe this deal is a vote of confidence in the UK North Sea and offers proof that the industry’s increasing competitiveness, and improvements to the fiscal and regulatory regime, are starting to produce positive results.”

The North Everest platform is involved in the Royal Dutch Shell deal with Chrysaor.

Andy Brown said the deal is a vote of confidence in the UK North Sea.