Shell has sold interests offshore Norway to Norwegian energy producer OKEA. File Photo A.J. Sisco/UPI | License Photo
June 20 (UPI) -- Supermajor Royal Dutch Shell said Wednesday it sold off its entire stake in two fields in production off the Norwegian coast for $556 million.
Shell's subsidiary in Norway sold its entire 44.56 percent interest in the Draugen field and its 12 percent in the Gjøa to Norwegian energy company OKEA.
OKEA CEO Erik Haugane in a statement on the deal said the agreement with Shell was a "high-quality acquisition."
His company estimates it will become the 19th largest producer offshore Norway with the deal. The Shell acquisition gives it a boost in net production of about 22,000 barrels of oil equivalent.
With the new interest in Draugen, OKEA said it aims to extend production into the 2040s by becoming the field's operator. Similar ambitions were expressed for Gjøa, where links to existing infrastructure could extend field life and generate value for the company.
Shell's remaining interests in offshore Norway represent about 14 percent of total production from the country. Andy Brown, the director of exploration and production, said the company remains a key player in Norway, but is working to streamline its portfolio.
"This deal is part of Shell's global, value-driven $30 billion divestment program and is consistent with our strategy to high-grade and simplify our portfolio," he said in a statement.
Shell's divestment streak is part of its new strategy that was triggered in part by the 2015 mega-merger with British energy company BG Group.
Norway is one of the largest oil and gas producers in the world. The Norwegian Petroleum Directorate, the nation's energy regulator, reported a preliminary rate of production from May of 1.29 million barrels of oil. Including natural gas liquid and condensate, an ultra-light type of petroleum product, production last month averaged 1.63 million barrels per day, about a quarter million barrels per day less than April.
The main reason for the decline was because of maintenance work at some Norwegian fields, including Troll, one of Shell's remaining assets in the country.