Shell has struck a deal to sell a 50% stake in the Na Kika oil platform and related assets to Talos Energy and Ridgewood Energy, with the price tag at $1.7 billion, the supermajor said.
According to Shell’s partner in Na Kika, BP, the deepwater platform off the Louisiana coast is one of the most prolific production hubs in the Gulf, linked to eight fields, and can produce up to 130,000 barrels of crude daily.
Along with Shell’s 50% interest in Na Kika, Talos and Ridgewood will also buy the company’s interests in associated fields and the Coulomb tieback, which Shell owns fully.
“The Gulf of America is one of our highest-value basins, and we are actively shaping our portfolio to ensure our Upstream business continues to be resilient and increasingly competitive,” Peter Costello, president of Shell’s Upstream division, said in the company’s news release. “We remain focused on sustaining our material liquids production into the next decade.”
Earlier this year, analysts warned that Shell was facing a reserve shortfall after its reserves fell to their lowest since 2013. The so-called ‘reserve life’ – denoting how long Shell’s proven reserves can sustain production at current levels – has dropped to below eight years, significantly lower than those of Exxon and TotalEnergies, each with a reserve life exceeding 12 years.
Unless something changes radically, the supermajor could see a shortfall of between 350,000 barrels daily and 800,000 barrels daily. Even so, CEO Wael Sawan said in February that the company did not need to start buying assets to replenish its reserve base—although the company has acknowledged it faces a gap in reserve replacement.
Shell eyes a 1% annual growth rate in its oil and gas output by 2030, with liquids production averaging 1.4 million barrels daily.
By Charles Kennedy for Oilprice.com
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