ConocoPhillips to sell Ursa and Europa interests to Shell in $735m deal

ConocoPhillips has entered into a definitive agreement to sell its working interests in the Ursa and Europa Fields, along with its stake in Ursa Oil Pipeline Company LLC, to Shell Offshore Inc. and Shell Pipeline Company LP, subsidiaries of Shell plc. The deal, valued at $735 million, is subject to customary closing adjustments and regulatory approvals. Additionally, the transaction includes an overriding royalty interest in the Ursa Field, a key deepwater asset in the Gulf of America.

Why Is ConocoPhillips Selling Its Ursa and Europa Interests?

The sale is part of ConocoPhillips’ ongoing strategy to optimize its oil and gas portfolio by divesting noncore assets while focusing on high-margin operations. The company has been actively streamlining its upstream assets, and this deal aligns with its $2 billion divestiture target.

According to Andy O’Brien, senior vice president of Strategy, Commercial, Sustainability & Technology, this move underscores significant progress in reshaping ConocoPhillips’ asset base. The proceeds from the sale are expected to be utilized for general corporate purposes, reflecting the company’s broader goal of maintaining financial flexibility and enhancing shareholder value.

What Are the Key Assets Involved in the Sale?

ConocoPhillips is relinquishing its 15.96% working interest in the Ursa Field, a deepwater oil-producing asset located in the Mars Basin, approximately 130 miles southeast of New Orleans. Additionally, the company is transferring its 1% working interest in the Europa Field, another offshore prospect in the region. These assets collectively contributed approximately 8 thousand barrels of oil equivalent per day (MBOED) in 2024.

Another crucial component of the sale is ConocoPhillips’ 15.96% membership interest in Ursa Oil Pipeline Company LLC, a Shell-operated pipeline that supports offshore crude transportation. Furthermore, ConocoPhillips is including its 3.5% overriding royalty interest (ORRI) in Ursa, an asset originally acquired through its November 2024 merger with Marathon Oil Corporation.

How Does This Deal Benefit Shell?

For Shell, this acquisition significantly expands its footprint in the Gulf of America by increasing its working interest in the Ursa platform from 45.3884% to a potential 61.35%, subject to the preferential rights elections of other project partners.

Zoë Yujnovich, Shell’s Integrated Gas & Upstream Director, stated that this investment strengthens Shell’s strategy of maximizing value from existing upstream assets. She emphasized that the Ursa platform is a long-producing, high-margin asset that generates strong free cash flow, making it an attractive opportunity for expansion.

Why Is the Ursa Platform Important to Shell’s Growth?

The Ursa Tension-Leg Platform (TLP) has been a critical deepwater hub since it commenced production in 1999. Situated within the Mars Basin, one of the most hydrocarbon-rich regions in the Gulf of America, the Ursa and Princess Fields have collectively produced over 800 million barrels of oil equivalent over the past 25 years.

By increasing its stake in Ursa, Shell is reinforcing its commitment to the Gulf of America, where it remains one of the largest leaseholders and the leading deepwater operator. The company has been strategically focusing on developing assets close to its existing infrastructure, ensuring cost-efficient production and optimized capital allocation.

Additionally, Shell has emphasized that its Gulf of America production has one of the lowest greenhouse gas (GHG) intensities in the industry, citing data from the International Association of Oil & Gas Producers. This aligns with its broader goals of reducing emissions while maintaining energy security through high-efficiency upstream investments.

When Will the Deal Be Finalized?

The transaction remains subject to regulatory approvals, preferential rights elections by other working interest partners, and customary closing conditions. Both companies expect the deal to be finalized by the end of the second quarter of 2025, with the effective date set as January 1, 2025.

As ConocoPhillips advances its portfolio optimization strategy, Shell is leveraging the acquisition to enhance its deepwater production growth while maintaining a focus on high-margin assets. The agreement further cements Shell’s dominance in the Gulf of America, a region central to its long-term upstream investment strategy.