Shell divests Gabon onshore interests
Mar 24, 2017
Royal Dutch Shell plc (Shell), through its affiliates, has reached an agreement with Assala Energy Holdings Ltd. a portfolio company of The Carlyle Group (CG: NASDAQ), to sell 100 percent of its Gabon onshore interests for $587 million. The Sale & Purchase Agreement (SPA) is subject to certain conditions which include various approvals. Closing is expected in mid-2017.
The purchaser will also assume debt of US$285 million as part of the transaction. The purchaser will make additional payments up to a maximum of US$150 million depending on production performance and commodity prices. The transaction will result in an impairment charge of $53 million post tax which will be taken in Q1 2017.
This transaction consists of all of Shell’s onshore oil and gas operations and related infrastructure in Gabon: five operated fields (Rabi, Toucan/Robin, Gamba/Ivinga, Koula/Damier, and Bende/M’Bassou/Totou), participation interest in four non-operated fields (Atora, Avocette/M’Boukou, Coucal, and Tsiengui West), as well as the associated infrastructure of the onshore pipeline system from Rabi to Gamba and the Gamba Southern export terminal. Shell onshore in Gabon produced approximately forty-one thousand barrels of oil equivalent per day in 2016 and Shell Trading (STASCO) will continue to have lifting rights from the assets for the coming 5 years.
Andy Brown, Shell’s Upstream Director, said: “Shell is very proud of the strong legacy we have built in Gabon over the past 55 years. The decision to divest was not taken lightly, but it is consistent with Shell’s strategy to concentrate our Upstream footprint where we can be most competitive. Shell will continue to pursue opportunities in Sub Saharan Africa.”
He then added, “Together with recent divestments in the UK, Gulf of Mexico and Canada, this transaction shows the clear momentum behind Shell’s $30bn divestment programme, and it helps us to high-grade and simplify our upstream portfolio following the acquisition of BG.”
As a result of the sale some 430 local Shell employees will become part of Assala Energy at completion.
Assala Energy Holdings will acquire these assets with equity from two Carlyle funds: Carlyle International Energy Partners (CIEP) and Carlyle Sub-Sahara Africa Partners (SSA).
Notes to editors
The sale of Shell Upstream Gabon S.A. and Shell Gabon S.A., referred to as the Onshore Shell Gabon assets, to Assala Energy Holdings Ltd., a portfolio company owned by Carlyle International Energy Partners (CIEP) & Carlyle Sub-Sahara Africa Partners (SSA) both of which are funds managed by global alternative asset manager, The Carlyle Group (CG: NASDAQ).
An initial consideration compromising:
- $587 million for the sale of the shares, plus interest accruing from the effective date to closing
- Debt of $285m will be assumed by the purchaser
The additional expected value covers:
- Effective date for the transaction is 31 December, 2015.
- Up to $150 million in contingent payments dependent on oil price and production.
- Shell Trading (STASCO) having continued lifting rights from the Gabon onshore assets for the coming 5 years.
Details of the transactions:
- Shell employs some 480 staff which includes approximately 50 expatriates.
- The head office is based in Gamba with other offices in Libreville and Port-Gentil.
- Shell has a 75% equity interest in Shell Gabon (SG), with the other 25% held by the government of Gabon, and 100% interest in Shell Upstream Gabon (SUG).
- The stake in each of the onshore assets being sold:
(Exclusive Exploitation Authorisations)
|SG *||SUG **||Total Gabon***||Addax||Sinopec||Shell Cashflows |
(75% SG + 100% SUG)
|Atora (Non-Operated Venture)||20%||40%||40%||0%||0%||55%||2021|
|Avocette (Non-Operated Venture)||42.5%||0%||57.5%||0%||0%||32%||2031|
|Coucal (Non-Operated Venture)||42.5%||0%||57.5%||0%||0%||32%||2031|
|Tsiengui-W **** (Non-Operated Venture)||40%||0%||0%||40%||20%||30%||2028|
|Koula (Operated Venture)||40%||0%||0%||40%||20%||30%||2028|
|Toucan / Robin (Operated Venture)||44.25%||50%||0%||0%||5.75%||83%||2023 (T) |
|Rabi (Operated Venture)||42.5%||10%||47.5%||0%||0%||42%||2022|
|Bende / Totou (Operated Venture)||90%||The State owns the remaining 10%||The State owns the remaining 10%||The State owns the remaining 10%||The State owns the remaining 10%||68%||2021|
|Gamba / Ivinga (Operated Venture)||100%||0%||0%||0%||0%||75%||2042|
*) Shell has a 75% equity interest in Shell Gabon, with the other 25% held by the government
**) Shell Upstream Gabon has the interests of Amerada Hess (Troika deal) and is 100% Shell-owned
***) In Avocette, Coucal and Rabi: combination Total Gabon & Total Participations Pétrolières Gabon
****) Currently run as a contract through an Interim Operating Agreement (4 well prod.).
Shell International Media Relations: +44 207 934 5550
Shell US Media Relations: +1 713 241 4544
International: +31 70 377 4540
North America: +1 832 337 2034
The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate legal entities. In this announcement “Shell”, “Shell group” and “Royal Dutch Shell” are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer to subsidiaries in general or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies. ‘‘Subsidiaries’’, “Shell subsidiaries” and “Shell companies” as used in this announcement refer to companies over which Royal Dutch Shell plc either directly or indirectly has control. Entities and unincorporated arrangements over which Shell has joint control are generally referred to as “joint ventures” and “joint operations” respectively. Entities over which Shell has significant influence but neither control nor joint control are referred to as “associates”. The term “Shell interest” is used for convenience to indicate the direct and/or indirect ownership interest held by Shell in a venture, partnership or company, after exclusion of all third-party interest.
This announcement contains forward-looking statements concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘goals’’, ‘‘intend’’, ‘‘may’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘plan’’, ‘‘probably’’, ‘‘project’’, ‘‘risks’’, “schedule”, ‘‘seek’’, ‘‘should’’, ‘‘target’’, ‘‘will’’ and similar terms and phrases. There are a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this announcement, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including regulatory measures addressing climate change; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. There can be no assurance that future dividend payments will match or exceed previous dividend payments. All forward-looking statements contained in this announcement are expressly qualified in their entirety by the cautionary statements contained or referred to in this announcement. Readers should not place undue reliance on forward-looking statements. Additional risk factors that may affect future results are contained in Royal Dutch Shell’s 20-F for the year ended December 31, 2016 (available at www.shell.com/investor and www.sec.gov). These risk factors also expressly qualify all forward looking statements contained in this announcement and should be considered by the reader. Each forward-looking statement speaks only as of the date of this announcement, March 24, 2017. Neither Royal Dutch Shell plc nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this announcement.
We may have used certain terms, such as resources, in this announcement that United States Securities and Exchange Commission (SEC) strictly prohibits us from including in our filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website www.sec.gov