Oil giant Shell to sell Gabon operations to Assala Energy in £800m deal
Royal Dutch Shell has struck a deal to sell its onshore oil and gas operations in Gabon for up to 1 billion US dollars (£800 million) as it presses ahead with a wide-ranging divestment programme.
The energy giant will offload the assets to Assala Energy, a company backed by private equity firm Carlyle.
Assala is to pay 587 million US dollars (£470 million) upfront, take on 285 million US dollars (£228 million) of debt and make additional payments up to 150 million US dollars (£120 million) depending on performance and commodity prices.
The deal is part of Shell's 30 billion US dollar (£24 billion) divestment initiative. To this end, the oil giant has also sold off its Australian aviation fuel business for 250 million US dollars (£200 million) and offloaded most of its Canadian oil sands assets for 7.3 billion US dollars (£5.8 billion).
Shell's Gabon unit produced around 41,000 barrels of oil equivalent a day in 2016.
Andy Brown, Shell's upstream director, said: "Together with recent divestments in the UK, Gulf of Mexico and Canada, this transaction shows the clear momentum behind Shell's 30 billion US dollar divestment programme, and it helps us to high-grade and simplify our upstream portfolio following the acquisition of BG."
Shell, which sealed a £35 billion takeover of BG Group in February last year, is also embarking on an ambitious cost-cutting drive as the industry grapples with historically low oil price.
As a result of the sale some 430 local Shell employees will become part of Assala Energy at completion.