Oil major Shell sells $965m stake in Gulf of Mexico oilfield

(FILES) This file picture taken on Janua
Shell is expected to produce around 900,000 barrles of oil a day by 2020 (Source: Getty)

Shell is set to sell a $965m (£740m) stake in a US oilfield to Israeli oil firm Delek as the major continues to divest to prioritise long-term growth.

Delek CT Investment, a subsidiary of one of Israel’s biggest companies, will buy Shell’s 22 per cent stake in the Caesar-Tonga field, which extracts around 70,000 barrels of oil equivalent a day.

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It is around 190 miles south of New Orleans in the Green Canyon area of the Gulf of Mexico, and drills in waters around 4,900 feet deep.

“This transaction represents our continued focus on strategically positioning our deep-water business for growth and is consistent with our upstream strategy of pursuing competitive projects that deliver value in the 2020s and beyond.” said Shell’s upstream director Andy Brown.

“The sale will contribute to Shell’s ongoing divestment programme and allow us to direct resources to the areas where we see the most value in the longer term.”

The cash deal is expected to close by the end of the third quarter of the year, Shell said, but will be backdated to 1 January 2019.

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It represents a small proportion of Shell’s deep-water production, which is expected to pump out around 900,000 barrels of oil equivalent per day around the world by 2020. The production will come from already discovered and established reservoirs.

It comes as Delek plans to expand internationally, focusing on opportunities in the North Sea and North America.