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Unexpectedly Strong Jobs Report Sends Oil Soaring

Unexpectedly Strong Jobs Report Sends Oil Soaring

An unexpectedly strong jobs report…

Shell Mulls Divestment Of Norwegian Assets

Shell is considering a partial divestment of its US$3-billion business in Norway as part of an asset sale program aimed at reducing its debt load. The Anglo-Dutch supermajor’s debt swelled significantly after the acquisition of peer BG Group.

According to The Times, Shell is being pressed by shareholders to increase its efforts to speed up the US$30-billion divestment plan. The company has hired Rothschild to review its Norwegian operations, which include majority stakes in several North Sea fields in the Norwegian shelf as well as smaller interests in many other North Sea projects.

The company is also selling other North Sea assets in the British shelf. The latest news here was the tendering of the Buzzard field, valued at up to US$2.2 billion.

Earlier this year, there was media speculation that Shell would exit the North Sea entirely, but the company has denied the reports. At the moment, it operates 33 platforms there, with stakes in 65 oil and gas fields.

Last month, Shell said it had agreed with Canadian Tourmaline Oil Corp for the sale of oil and gas acreage worth over US$1 billion, as part of its divestment plan. The assets span 206,000 acres, both developed and undeveloped, in Alberta and British Columbia, with a total daily production rate of 24,850 barrels of oil equivalent.

The North Sea has become unattractive for oil majors thanks to the price slump, as it is notorious for much higher production costs than, say, the U.S. shale patch. Also, Big Oil is starting to pay more attention to smaller, faster-return project as a means of compensating for lower reserve replacement rates and costly but unsuccessful projects.

Shell has still not given up on big challenges, last week pledging US$10 billion to deepwater development in the Brazilian pre-salt layer, taking advantage of a legislative change aimed at encouraging more foreign companies’ participation in the country’s energy industry..

By Irina Slav for Oilprice.com

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