Shell Completes Sale to Norway's Okea

Shell announced November 30 that it has completed the sale of its interests in the Draugen oil and Gjoa gas fields offshore Norway to local independent Okea.

The final sale price was kroner 4.52bn (around $526mn). First announced four months ago, the sale involves a 44.56% operating interest in Draugen field, a 12% non-operated interest in Gjoa, and the 'Raket' office building in Kristiansund, and provides Okea with 20,000 b/d oil output and a revenue stream. Shell said it represented 14% of its Norwegian subsidiary’s 2017 production and that 153 staff will transfer from Shell to Okea with full continuity of service.

Shell added that it remains committed to Norway, including as operator of Ormen Lange and Knarr and as a partner in Troll, Valemon and Kvitebjorn - primarily gas interests. It remains the technical service provider of the Nyhamna gas process plant, which is of major significance in supplying the UK and European markets, and is a partner in the Norwegian carbon capture & storage project Northern Lights. 

Norske Shell managing director, Rich Denny, remarked: "Today’s deal completion was achieved despite a tight timeline from the sales and purchase agreement in June 2018."

Okea's CEO, Erik Haugane, said: "We are very pleased with the work that we have accomplished with Shell since the signing of the agreement on 20 June 2018. Thanks to our comprehensive and dedicated work together, we are able to close this transaction on schedule. This is the beginning of a new chapter for Okea, as operator of one of the most prestigious fields on the Norwegian continental shelf" namely Draugen. Prior to completion, it had only non-operated interests in producing fields offshore Norway, plus an operated stake in the small Grevling undeveloped oil field there.

Shell retains 80% of the decommissioning liability of Draugen and Gjoa up to an after-tax cap of $74mn, subject to indexation.