Japan’s Itochu Signs $406 Million Deal to Acquire Shell Iraq
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Shell EP Middle East has signed an agreement to sell 100 percent stake in Shell Iraq (SIBV) to a subsidiary of Japan’s Itochu for $406m.
Under the terms of the deal, Shell will divest SIBV, which owns 19.6 percent stake in the West Qurna 1 oil field in Iraq, for $406m including also debt of $144m.
Shell Upstream Director Andy Brown said: “Iraq is an important country for the Shell Group, and exiting West Qurna 1 allows us to focus our resources on other assets in our Iraq portfolio. We are grateful for the support of the Iraqi government during the divestment process.
“Shell remains committed to working with its partners to redevelop Iraq’s energy infrastructure by capturing associated gas, through the Basrah Gas Company (BGC) Joint Venture, for domestic and regional consumption.
“This deal maintains the momentum behind Shell’s $30bn divestment program and is in line with the drive to simplify our upstream portfolio and reshape the company into a world class investment.”
The transaction, which has already secured necessary regulatory consent, is planned to be complete in the next few days.
The sale includes Shell Iraq’s 19.6 percent stake in West Qurna 1 (WQ1) technical service contract (TSC) in Iraq.
Other TSC partners include ExxonMobil with 32.7 percent interest, PetroChina with 32.7 percent stake, Pertamina with 10 percent interest and Oil Exploration Company with 5 percent interest.
The sale, however, does not affect Shell’s other businesses in the country.
Shell earlier announced its plans to divest $30bn worth of assets by the end 2018 and simplify the upstream portfolio.
As part of this effort, Shell has agreed to offload its stakes in upstream business in New Zealand to Austria-based oil and gas firm OMV for $578m.
As per the deal, OMV will acquire Shell’s 48 percent joint venture interest in Pohokura gas producing field in New Zealand, 83.75 percent interest in Maui field as well as related infrastructure for production, storage and transportation.
Source: Energy Business Review
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