Shell Workers Move to Chrysaor as North Sea Asset Sale Completes
Two-hundred and fifty three Royal Dutch Shell plc employees have transferred to Chrysaor Holdings Limited, following the completion of Shell’s sale of a package of UK North Sea assets to Chrysaor.
The completion of the transaction means that Chrysaor now has around 400 employees, with approximately 200 based in its operations center at The Capitol Building in Aberdeen, 150 working offshore and 50 at its corporate headquarters in London.
As a result of the deal, Chrysaor has become the leading independent exploration and production company in the UK. Production from the acquired assets is forecast to average just under 120,000 net barrels of oil equivalent per day for 2017, with current unit operating costs running at less than $15 a barrel.
The package of assets consists of Shell’s interests in Buzzard, Beryl, Bressay, Elgin-Franklin, J-Area, the Greater Armada cluster, Everest, Lomond and Erskine projects, plus a 10 percent stake in Schiehallion.
Chrysaor agreed to purchase the assets for a total of up to $3.8 billion, including an initial consideration of $3 billion and a payment of up to $600 million between 2018-2021 subject to commodity price, with potential further payments of up to $180m for future discoveries. This sale was announced on January 31 and has an effective date of July 1, 2016.
In a company statement released Wednesday, Shell said it retained a ‘significant, more focused and strengthened presence in the UK North Sea, to which it remains committed’.
“Completion of this deal shows the clear momentum behind Shell’s $30 billion divestment program and is in line with Shell’s drive to simplify the upstream portfolio and re-shape the company into a world class investment,” a company spokesperson said in a Shell statement.
Phil Kirk, chief executive of Chrysaor, said the company was grateful to Shell for collaborating with the company to ensure a smooth and safe transition.
“I am excited at the prospect of our highly professional existing and new staff working together with our new license and supply chain partners to develop and grow the company together. Safe and efficient operation of the assets is our primary objective as we pursue our development plans,” he said.
“We are already working hard to mature drilling opportunities in the Chrysaor-operated assets, secure further third party business for the hub assets, and actively support viable development initiatives proposed by our partner-operated assets,” he added.
Linda Z. Cook, chairman of Chrysaor, said the company was in a good position to capitalize on the North Sea’s changing fortunes.
“With improving operating costs, competitive fiscal terms and a world class skills base, the North Sea is undergoing a period of rejuvenation. Through its acquisition of the Shell portfolio Chrysaor is now firmly placed to take advantage of this change.”
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