July 8, 2008
Shell Speeds Up Its Exit From North Sea With Abu Dhabi Sale
By Frank Urquhart
OIL giant Shell yesterday announced the completion of an agreement to sell eight of the company's oil and gas fields in the East Shetland basin of the North Sea and transfer hundreds of jobs to a subsidiary of the Abu Dhabi national oil company.
Fears that Shell was preparing a retreat from its vast North Sea operations were first raised last June when the oil major announced plans to sell off its East Shetland assets on the same day as the company revealed it was scrapping proposals for a new GBP 25 million subsea centre of excellence in Aberdeen, Europe's oil capital.
It was revealed earlier this year that Shell and its operating partner, Exxon Mobil, had entered into exclusive negotiations with the Abu Dhabi National Energy Company for the sale and transfer of their equity interests in the Tern, Eider, Cormorant North and South fields as well as related subsea satellite fields and infrastructure.
A spokesman for Shell said yesterday: "Shell UK and ExxonMobil have each signed a sale and purchase agreement with UK-based Taqa Bratani Limited, a wholly owned subsidiary of Abu Dhabi National Energy Company, for the sale and transfer of their equity interests in the Tern, Kestrel, Eider, Pelican, Otter, Hudson, Cormorant North and South Cormorant fields and related infrastructure.
"The sale, which includes all equity, associated infrastructure and production licences, is subject to fulfilment of certain conditions, including government consent."
There are some 400 Shell staff posts, both onshore and offshore, linked to the assets being sold. A further 361 contract employees work offshore on the four main platforms.
The Shell spokesman explained: "The majority of Shell staff associated with the assets will transfer to Taqa in accordance with the transfer of undertakings legislation. Shell and Taqa are continuing active consultation and communication with staff and their representatives."
Taqa has appointed Aberdeen-based Wood Group as the operating and maintenance contractor for the fields. Peter Barker-Homek, Taqa's chief executive, said: "This announcement brings us one step closer to our stated strategy of building a global energy company, with an equal distribution of assets in North America, Europe and the Middle East.
"We believe that the North Sea offers significant potential for companies like Taqa and we will be making a significant investment over the coming years to extend the productive life and commercial viability of these assets."
By utilising the latest technology and infrastructure, Taqa plans to extend the productive life of the fields beyond 2020.
The sale amounts to some 7 per cent of Shell's North Sea portfolio. Following the sale, Shell will still be left with a total of more than 40 oil and gas-producing assets in the UK continental shelf.
The East Shetland basin fields account for around 27,200 barrels of oil equivalent per day (boepd) out of Shell's 350,000 boepd output.
In May of this year, Shell sold its Dunlin cluster of fields in the northern North Sea to the British company Fairfield Energy and two subsidiaries of the Mitsubishi Corporation.
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