Contractors Unlimited

Shell In Strategic Asset Swap with Hess

Shell In a move to consolidate its exploration and production portfolio in the North Sea and West Africa, Shell has agreed to acquire Hess Corporation's entire upstream portfolio in Gabon and its interest in the Clair field, which lies in British waters west of the Shetland Islands. In return, Hess would acquire Shell's interest in a pair of Norwegian offshore fields, Valhall and Hod. This transaction is a strategic trade and no cash payment is involved.

"We are very pleased to increase our equity stake in Gabon - a country in which we have operated with great success for nearly 50 years", said Malcolm Brinded, Executive Director of Shell's Upstream International business. "At the same time, by increasing our interest in the Clair field, we are also demonstrating our continued interest in investing in long-term assets of the UK - one of our heartlands."

The swap, which is still subject to government approval and other requisite consents, would rearrange the companies' ownership interests in Gabon, the UK and Norway. Shell's interest in its Gabonese production licenses would increase from 42.5% to 52.5% in Rabi-Kounga, from 44.3% to 94.3% in Toucan and from 20% to 60% in Atora. Its interest in the Ozigo exploration license would increase from 44.3% to 94.3%. Also, as part of the transaction, Shell's stake in the Clair field of the UK would increase from 18.7% to 28%.

Hess, in turn, would take over Shell's interests in the Valhall and Hod fields. As a result, Hess' stake in those fields would double - to 56.2% and 50%, respectively. BP is the operator of Clair as well as of Valhall and Hod.

Posted 21/12/09

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Hess Corporation, with headquarters in New York, is a global integrated energy company engaged in the exploration, production, purchase, transportation and sale of crude oil and natural gas, as well as the production and sale of refined petroleum products.

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