Royal Dutch Shell sells Gabon interests for $1bn

Oil giant Royal Dutch Shell is to sell its onshore interests in Gabon to Assala Energy, a portfolio company of Carlyle Group, for up to $1bn.

The sale of the Shell’s onshore oil and gas operations and related infrastructure in Gabon is subject to regulatory approval and is expected to close mid-2017.

Assala will pay Shell $587m in cash and assume $285m of debt and pay up to $150m depending on commodity prices and production performance. It will buy the the assets with equity from two Carlyle funds, Carlyle International Energy Partners and Carlyle Sub-Sahara Africa Partners.

Andy Brown, Shell’s upstream director, said that the decision to sell the Gabon interests were “not taken lightly” as Shell had been operating in the country for the past 55 years.

The sale is part of Shell’s $30bn divestment programme to reduce its debt burden after a £35bn takeover of BG Group. The company had previously sold assets in the UK, Gulf of Mexico and Canada, in order to upgrade and simplify its upstream portfolio.

The Gabon interests include five operated fields - Rabi, Toucan/Robin, Gamba/Ivinga, Koula/Damier, and Bende/M’Bassou/Totou - and associated infrastructure of the onshore pipeline system from Rabi to Gamba and the Gamba southern export terminal.

It also includes stakes in four non-operated fields, Atora, Avocette/M’Boukou, Coucal, and Tsiengui West and 430 local Shell employees who will become part of Assala after on completion of the sale.

Gabon produced about 41,000 barrels of oil equivalent per day in 2016 and the company’s subsidiary, Shell Trading (STASCO), will continue to have lifting rights from the assets for the next five years.

Shares in Royal Dutch Shell were down 0.36% to 2,090p at 1009 GMT.