OIL giant Shell has continued repaying its debt following its takeover of BG Group by completing the $3.8bn (£2.85bn) sale of a package of North Sea assets, including its interests in fields such as Beryl, Buzzard and Schiehallion.
The package – representing around half of the company’s 2016 North Sea output – makes buyer Chrysaor the largest independent operator in the North Sea, and comes after approval from regulators and stakeholders.
More than 250 staff have transferred to Chrysaor as part of the agreement first announced in January. As part of its debt repayment plans, Shell aims to sell off $30bn (£22.5bn) of assets by next year.
A company spokesman said Shell retained a more focused and strengthened presence in the UK North Sea and remained committed to it.
He added: “Completion of this deal shows the clear momentum behind Shell’s $30bn divestment programme and is in line with Shell’s drive to simplify the upstream portfolio and reshape the company into a world class investment.”
Finalisation of the deal came as Shell prepared to announce its third quarter results today, which analysts said were likely to be steady, given a combination of higher crude prices and continuing cost savings.
The update comes the week after Brent crude prices climbed above $60 for the first time in two years.
BP, meanwhile, surprised markets yesterday by becoming the first European oil and gas company since the 2014 price slump to resume share buybacks – a system whereby a firm buys back its own shares from the marketplace, usually because management believes they are undervalued.
That move came as BP reported a doubling in its Q3 profit.
The resumption of buybacks in the next quarter, along with strong growth in its oil and gas production and cash flow, lifted BP shares to their highest level in more than three years – when a barrel of oil was priced at around $100.
It suggests the company is shaking off the impact of the 2010 Deepwater Horizon spill in the Gulf of Mexico, known as Macondo, that cost more than $63bn (£47.4bn) in clean-up costs and penalties.
Chief financial officer Brian Gilvary said: “After three years of oil price correction and seven years after Macondo we are now back into a more normal state of growing the business in the current environment and we can deal with prices that go lower.”
Although BP is the first oil major to resume buybacks, others are making some attempts to woo shareholders. Statoil, of Norway, for example, will stop offering a “scrip” dividend – paid in shares rather than cash – in the fourth quarter, while France’s Total plans to do so next year.
Elsewhere, energy group Ineos has completed its acquisition of the Forties Pipeline System (FPS) in the North Sea, from BP.
The $350m (£199m) deal will see Ineos take control of the system that delivers almost 40 per cent of North Sea oil and gas. It will see around 300 staff transfer to a new business – Ineos FPS Ltd – which is part of Ineos Ltd.
Andrew Gardner, chief executive of the Ineos FPS, said: “Ineos is now the only UK company with refinery and petrochemical assets directly integrated into the North Sea and this deal provides the platform to potential future offshore Ineos investments.”
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