[Editor's note: This article was upated at 10:30 a.m. Nov. 30.]
Royal Dutch Shell Plc (NYSE: RDS.A) has exited the upstream sector in Ireland with the closing of its deal to sale its shares in Shell E&P Ireland Ltd. (SEPIL) for up to $1.30 billion to Canada Pension Plan Investment Board (CPPIB) subsidiary Nephin Energy Holdings Ltd. (NHEL).
Shell announced the closure of the sale, through its affiliate Shell Overseas Holdings Ltd., in a news release Nov. 30. Completion of the sale, which includes the company’s 45% interest in the Corrib offshore gas venture, follows receipt of all necessary partner and regulatory consents.
The transaction, which has an effective date of Jan. 1, 2017, includes an initial consideration of $958 million, interest of $54 million and additional payments of up to $285 million between 2018-2025, subject to gas price and production, according to the release.
Shell said the sale will contribute to its $30 billion divestment target for 2016-2018. The Netherlands-based company still has a presence in Ireland through its aviation joint venture, Shell and Topaz Aviation Ireland Ltd.
The company added that Shell Energy Europe Ltd. has signed an offtake agreement to purchase Corrib gas following completion.
In a separate news release, Vermilion Energy said it has assumed operatorship of the Corrib gas field on behalf of the joint venture partners. The company said CPPIB plans to transfer SEPIL along with a 1.5% working interest to Vermilion.
“This transfer has received all required government approvals and is expected to be completed in the coming weeks,” Vermilion said in the release. “The estimated purchase price after interim period adjustments is approximately €6 million.”
Following the transfer to Vermilion, Vermilion will hold a 20% operated interest in Corrib with NEHL holding a 43.5% non-operated interest and Equinor with a 36.5% non-operated interest.
Overall, 2018 was the Year of Consolidation as several E&Ps agreed to merge throughout the U.S., including inside and outside the prolific Permian Basin.
Shell agreed to sell its upstream interests in Denmark in the Danish Underground Consortium to Noreco for $1.9 billion as part of the oil major’s larger divestment program.