OIL giant Royal Dutch Shell has sold its onshore oil and gas assets in Gabon, central Africa, to Assala Energy Holdings, a portfolio company private equity firm the Carlyle Group, for $587 million (£470m).
In a statement, the Anglo-Dutch company said Carlyle would also assume debt of $285m (£228.4m) million as part of the deal, which is expected to be concluded by the middle of this year. It will also make extra payments to a maximum of $150m (£120.2m) depending on production performance and commodity prices, but Shell will retain exploration licences for two offshore blocks west of Gabon.
Andy Brown, Shell’s upstream director, said: “Shell is very proud of the strong legacy we have built in Gabon over the past 55 years.
“The decision to divest was not taken lightly, but it is consistent with Shell’s strategy to concentrate our upstream footprint where we can be most competitive. Shell will continue to pursue opportunities in sub-Saharan Africa.
“With recent divestments in the UK, Gulf of Mexico and Canada, this transaction shows the clear momentum behind Shell’s $30bn (£24bn) divestment programme, and helps us to high-grade and simplify our upstream portfolio after the acquisition of BG.”
The company sealed its £35bn takeover of BG in February 2016, and has embarked on a cost-cutting drive as the industry grapples with continuing low oil prices.
Shell onshore in Gabon produced 41,000 barrels of oil equivalent per day in 2016.
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