Shell to Sell Oil Blocks in the Gulf of Mexico

Published at 09:24AM - 30/08/16

Plans for Shell to sell oil blocks in the Gulf of Mexico were announced by the supermajor this week in the wake of its major divestment programme disclosed earlier this year.

The company will sell 100% of its record title interest in Gulf of Mexico Green Canyon blocks 114, 158 and 248 through its affiliate Shell Offshore Inc.

The agreement entails the sale of “the Brutus/Glider assets to EnVen Energy Corporation, through its affiliate Energy Ventures, LLC. In line with Shell’s global divestment plans, this transaction includes US$425 million (£325.15 million) in cash,” the company informed in a statement.

Shell to Sell Oil Blocks in the Gulf of Mexico

The transaction is expected to close in October 2016 and will involve the Brutus Tension Leg Platform (TLP), the Glider subsea production system and the oil and gas lateral pipelines used to evacuate the production from the TLP.

Combined, the Brutus/Glider assets have a joint current production estimated at approximately 25,000 barrels of oil equivalent per day (boepd).

Shell to Sell Oil Blocks in the Gulf of Mexico
Shell Plans to Rise Oil Production by 300,000 bpd by 2020

The company currently produces approximately 600,000 boepd and plans to increase production to more than 900,000 boepd by the beginning of the 2020s using only already discovered and established reservoirs.

Shell Divestment Plan Brings More Job Cuts

According to Shell’s 2015 annual report, the supermajor had already sold more than US$20 billion (£15.3 billion) worth of non-strategic assets in 2014-2015.

The plan is to increase this wave of divestments to US$30 billion (£22.95 billion) in the period between 2016 and 2018, the company explained at the time.

Shell announced this divestment target at the same time it announced plans to acquire the BG Group in 2015.

Soon after, the company announced plans to cut down its workforce located in the Gulf of Mexico by approximately 25%.

Although Shell did not provide any further details at the time, this would represent approximately 192 jobs and would include Shell employees and contractors.

These job cuts in the Gulf of Mexico are part of the 2,200 job cuts announced by Shell in May.