Shell wraps up $965m sale of Caesar Tonga oil field stake to Equinor
Energy acquisition news : Shell Offshore, a subsidiary of Royal Dutch Shell, has wrapped up its previously announced $965 million sale of 22.45% stake producing Caesar Tonga oil field in the US Gulf of Mexico to Equinor’s subsidiary Equinor Gulf of Mexico.
Originally, Shell signed a deal with Israel’s Delek Group to sell its non-operated stake in the Caesar Tonga oil field for the same price. However, the deal fell through with Equinor exercising its preferential rights as an existing stakeholder in the Gulf of Mexico oil field. Through the transaction, the Norwegian oil and gas company boosted its stake in the Caesar Tonga oil field to 46%.
Anadarko Petroleum, which is on the verge of being acquired by Occidental Petroleum is the operator of the Caesar Tonga oil field with 33.75% while Chevron holds 20.25% stake.
For Shell, the transaction meant its exit from the Gulf of Mexico oil field and is said to represents the company’s focus on strategically placing its deep-water business for growth. The sale of the stake in the Caesar Tonga oil field is also in line with its strategy to go after competitive projects that generate value in the 2020s and beyond.
The Caesar Tonga oil field, which has been producing since early 2012, spans the GC683, GC726, GC727 and GC770 blocks and is contained in water depths of nearly 4,900 feet. The Gulf of Mexico oil field, which has an expected life of 30 more years, is said to have a production of around 71,000 barrels of oil equivalent per day, with 90% of it being oil.
The Caesar Tonga oil field is located 300km south of Louisiana coast in the Green Canyon area. The Gulf of Mexico oil field has been developed with eight wells linked by an underwater pipeline network to a production platform owned by Anadarko Petroleum, which transports the oil and gas through an existing pipeline to the Louisiana and Texan coasts.
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