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.).
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