Shell and Esso to Market Selected North Sea Assets

Shell U.K. Limited (Shell) has announced that the company, along with Esso Exploration and Production UK Limited, an ExxonMobil subsidiary, intends to market their equity interests in a number of Northern North Sea assets, which include operated interests in Cormorant Alpha, Cormorant North, Tern, Eider, Kestrel and Pelican and non-operated interests in Otter and Hudson, as well as an operated interest in the associated oil evacuation system. Interests will include acreage, production licences and associated infrastructure in Quadrants 210 and 211. The assets will be offered to the market on an open, competitive basis.

Both companies can also confirm that they are in negotiation with Fairfield Energy for the sale of their interests in the Dunlin cluster (Dunlin, Dunlin South West, Osprey and Merlin). Interests will include production licences and associated infrastructure in Quadrant 211. The deal is subject to completion of a final Sales and Purchase Agreement and the fulfillment of a number of conditions, including Government consent and co-venturer approval.

Shell has also initiated the marketing of its interest in the Strathspey field (block 4/4a), a non-operated sub-sea oil and gas development tied back to the Ninian platform in the Northern North Sea.

Tom Botts, Executive Vice President, Shell Exploration & Production in Europe, said: "Active management of our assets is not new, and is a key part of Shell's portfolio-based strategy. These are relatively high cost assets within our European portfolio, where other operators might be better placed to add value. At Shell, we are committed to focus on where we can best use our people, capital and technologies, for competitive long-term returns, and on a global basis."

"Shell remains committed to Europe and the North Sea as a core business area and holds a key strategic position in security of energy supply to the UK."

Notes to editors: More about Shell:
•  Shell produces some 350,000 barrels oil equivalent per day (boe/d) in the UK. The asset announcements today will impact some 25,000 - 30,000 boe/d from that portfolio.
•  Shell U.K. Limited is operator in the UK sector of the North Sea on behalf of Shell, Esso and other co-venturers.
•  In addition to the U.K., Shell has EP operations in The Netherlands, Norway, Italy, Germany, Austria, Denmark and Ireland.
•  Shell employs some 28,600 staff in EP operations worldwide.

Shell remains committed to security of energy supply to the UK. Recent and future UK projects underline this strategy:

•  The £350 million Fife/St Fergus gas plants rejuvenation
•  Import of Norwegian gas through the Shell operated FLAGS line
•  Latest generation technology Monotowers produce gas in the Southern North Sea (Cutter for the UK, K17 for the Netherlands) and the DTI has this year granted approval for development of the Caravel, Shamrock and Curlew C fields
•  Later this year Shell takes over as operator of the Ormen Lange gas field - which will provide around 20% of the UK's gas needs
•  The $1billion upgrade project across Shell-operated North Sea assets
•  Reception facilities for the Balgzand/Bacton gas pipeline

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Posted 20/06/07

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