Shell sells Permian business to ConocoPhillips

SHELL has announced the sale of its Permian assets to ConocoPhillips for US$9.5bn.

Shell’s Permian business includes around 91,000 net ha with a current production capacity of around 175,000 boe/d, as well as more than 965 km of operated crude, gas, and water pipelines and infrastructure. It said that the majority of Permian employees and many Houston-based employees will be offered employment with ConocoPhillips. The deal is expected to close in the fourth quarter, subject to regulatory clearance.

Wael Sawan, Upstream Director at Shell, said: “After reviewing multiple strategies and portfolio options for our Permian assets, this transaction with ConocoPhillips emerged as a very compelling value proposition. This decision once again reflects our focus on value over volumes as well as disciplined stewardship of capital. This transaction, made possible by the Permian team’s outstanding operational performance, provides excellent value to our shareholders through accelerating cash delivery and additional distributions."

Ryan Lance, CEO of ConocoPhillips, said: “Our financial strength allowed us to structure a competitive offer for this transaction and we are very excited to enhance our position in one of the best basins in the world with the addition of Shell’s high-quality assets and talented workforce.”