Delek to buy Shell’s stake in U.S. Gulf of Mexico field for $965 million

Israel’s Delek Group has agreed to buy Shell’s 22.45% stale in the Caesar-Tonga field in the US Gulf of Mexico to Delek CT Investment LLC, a subsidiary of Delek Group Ltd (Delek). The total consideration for this deal is $965 million in cash.

Operated by Anadarko, the Caesar-Tonga asset sits approximately 190 miles (300 kilometers) south-southwest from New Orleans, Louisiana in the Green Canyon area of the US Gulf of Mexico. The development area covers blocks GC683, GC726, GC727 and GC770 at water depths of about 4,900 feet (1,500 meters).

Anadarko owns the 33.75% interest, Equinor (23.55%), Shell (22.45%), and Chevron (20.25%). The field is tied back to Anadarko’s Constitution SPAR through subsea equipment. Current total average production at Caesar-Tonga is over 70,000 boe/d total gross. First oil from the Caesar-Tonga field was produced in March 2012.

Andy Brown, Shell’s Upstream Director who will be leaving his position in July said: “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.”

“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 transaction is likely to close by the end of the third quarter of 2019, with an effective date of January 1, 2019. Shell also said Delek would into a long-term purchase and sales agreement with Shell Trading (US) Company for the oil produced.

Shell, who was last month the highest bidder for 87 blocks in the U.S. Gulf of Mexico, said its global deep-water production is expected to exceed 900,000 barrels of oil equivalent per day (boe/d) by 2020 from already discovered and established reservoirs.

Offshore Energy Today Staff

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