Shell has agreed to sell its wholly-owned subsidiary BG Cyprus Ltd to MOL Group of Hungary for $720 million, as the UK-based oil and gas supermajor targets to grow its LNG value chain.
Shell on Friday announced the agreement with MOL Group for the sale of BG Cyprus, which holds a 35% non-operated interest in the Cyprus Offshore Block 12, subject to customary adjustments and milestone-linked contingent payments.
Block 12 contains the Aphrodite gas field, which is operated by Chevron’s local subsidiary. Chevron, MOL, and NewMed Energy, which will be the new co-owners of the field, would be working toward a final investment decision to develop Aphrodite. All the potential produced gas from Aphrodite is expected to be sold to the Egyptian Natural Gas Holding Company (EGAS).
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Shell became a holder of the 35% non-operated interest in Aphrodite after it acquired BG Group in early 2016.
Now Shell looks to focus on its LNG value chain, Cederic Cremers, Shell’s Integrated Gas President, said.
“Our decision to exit is driven by disciplined capital allocation and portfolio choices, as we focus on opportunities that strengthen our integrated LNG value chain,” the executive said.
Gas discoveries offshore Cyprus have been of interest to oil majors in recent years as Cyprus and nearby Greece look to become energy hubs for gas supply to Europe.
Just this week, Eni and TotalEnergies took the final investment decision to develop the Cronos gas field in deep waters offshore Cyprus, in the Mediterranean country’s first hydrocarbon development expected to bring first gas to market in 2028.
Cronos, discovered in 2022 and successfully appraised in 2024, is Eni’s first development in Cyprus and the country’s inaugural hydrocarbon project.
The gas from Cronos will be transported and processed in existing Zohr facilities in Egypt, then transferred and liquefied in Egypt’s Damietta LNG plant for export to international markets, primarily Europe.
By Michael Kern for Oilprice.com
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