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Summary
- Deal for up to $720 million
- Unit holds stake in block containing Aphrodite gas field
- Deal part of Shell’s efforts to expand LNG portfolio
(Reuters) – Shell said on Friday it had agreed to sell its BG Cyprus unit to Hungarian oil and gas firm MOL Group for up to $720 million, as the British oil major sharpens its focus on LNG operations.
BG Cyprus’ 35% non-operated interest in a Cyprus Offshore block, home to the Aphrodite gas field in the eastern Mediterranean, will be controlled by MOL upon the expected 2027 completion of the deal.
“Our decision to exit is driven by disciplined capital allocation and portfolio choices, as we focus on opportunities that strengthen our integrated LNG value chain,” Shell’s Integrated Gas President Cederic Cremers said in a statement.
Shell has been seeking to expand its LNG portfolio to capitalise on rising global demand for the fuel and on Thursday said it will take a final investment decision on its Canada LNG project phase 2 by the end of 2026.
The Aphrodite gas field, located in an exclusive economic zone off the coast of Cyprus, is operated by Chevron’s Cypriot unit with a 35% stake, while BG Cyprus and Israel’s NewMed Energy hold 35% and 30% non-operating interests, respectively.
BG Group, which was bought out by Shell in 2016, had acquired the Aphrodite interest in 2015 through its Cyprus unit.
Shell announced on Thursday that its net profit more than doubled from last year to $9.84 billion in the second quarter, beating expectations, helped by higher energy prices and increased market volatility during the Middle East conflict.
Profits from Shell’s integrated gas business, which includes the world’s biggest LNG trading desk, comfortably beat expectations at $2.7 billion, 55% above last year’s despite its gas production falling 31% quarter-on-quarter.
Reporting by Prerna Bedi in Bengaluru and Stephanie Kelly in London; Editing by Subhranshu Sahu and Joe Bavier
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