Shell EP Middle East Holdings B.V. has agreed to sell the entire share capital of Shell Iraq B.V (SIBV), which holds its 19.6% stake in the West Qurna 1 oil field, for $406 million, to a subsidiary of Japan's Itochu Corporation.
The purchaser will also assume debt of $144 million as part of the transaction. The sale has received the necessary regulatory consent, is expected to complete in the next few days, and has an effective date of 31 December 2015.
Since joining the project in 2009, Shell has enjoyed successful cooperation with its partners in the West Qurna 1 venture, which will continue to be operated by ExxonMobil.
Shell’s Upstream Director, Andy Brown (pictured), said:
“Iraq is an important country for the Shell Group, and exiting West Qurna 1 allows us to focus our resources on other assets in our Iraq portfolio. We are grateful for the support of the Iraqi government during the divestment process.
“Shell remains committed to working with its partners to redevelop Iraq’s energy infrastructure by capturing associated gas, through the Basrah Gas Company (BGC) Joint Venture, for domestic and regional consumption.
"This deal maintains the momentum behind Shell’s $30bn divestment programme and is in line with the drive to simplify our upstream portfolio and reshape the company into a world class investment.”
Shell’s other businesses in the country will not be affected by this divestment.