Shell completes $30 billion divestment plan with Danish upstream assets sale

Royal Dutch Shell will sell its Danish upstream business to Norwegian Energy (Noreco) for US$1.9 billion, in a deal that completes its three-year $30 billion divestment plan.

The payment from Noreco to Shell will be adjusted for the cash flow Shell has generated since the deal’s effective date, which will be set to Jan. 1, 2017. “We expect to pay around $1.2 billion,” Noreco’s chairman Riulf Rustad told Reuters.

Noreco’s acquisition will give the company a further 67,000 barrels of oil equivalents per day (poepd), making it the second largest oil and gas producer in Denmark, behind French major Total.

The deal gives Noreco a 36.8% stake in the Danish Underground Consortium (DUC), which has assets in 15 offshore fields. The firm will also take on all of Shell’s existing commitments and obligations, including the Tyra field redevelopment.

“Noreco expects to maintain strong production in the years to come…As the Tyra hub is being redeveloped, the portfolio will be revitalised and offer improved economics accompanied by prolonged field life,” said Noreco.

The Oslo-listed firm saw its shares surge by 90% in the wake of the announcement, closing yesterday up 54% at 231.5 Norwegian crowns.