Shell to sell BG Cyprus and Aphrodite gas stake to MOL Group

Shell has agreed to merchantability its wholly owned subsidiary BG Cyprus to MOL Group for up to $720m (£534.86m), taxable to adjustments and milestone-related contingent payments.

The planned transaction volition spot MOL Group get Shell's 35% non-operated involvement successful Cyprus Offshore Block 12, which contains the Aphrodite state tract successful the eastbound Mediterranean.

Both companies expect to implicit the merchantability successful aboriginal 2027, pending regulatory approvals and modular closing conditions.

Block 12 is situated astir 170km south-east of Cyprus wrong the country's exclusive economical zone.

The Aphrodite state tract was discovered successful 2011 and has been further appraised done respective drilling campaigns. Estimates enactment contingent resources astatine astir 104 cardinal cubic metres (bcm), oregon 632 cardinal barrels of lipid equivalent (mboe), of state and 8 cardinal barrels (mbbl) of condensate.

Production from the Aphrodite tract is intended for merchantability to the Egyptian Natural Gas Holding Company, according to the existent improvement strategy.

BG Cyprus' associated task (JV) partners successful the task see Chevron Cyprus, which has an operating involvement of 35%, and NewMed Energy, which holds 30%.

In 2016, Shell bought BG Group for $70bn and absorbed its BG Cyprus subsidiary. This determination handed Shell the involvement successful the Aphrodite state tract that BG Cyprus had secured successful the erstwhile year.

After the latest transaction, MOL Group volition presume Shell's interests and corresponding obligations.

Shell said the determination to divest follows its enactment with the Government of Cyprus and its JV partners to beforehand the Aphrodite task to its existent stage. The institution stated that the merchantability would let it to realise the worth created frankincense far, portion the remaining partners beforehand towards a last concern determination (FID).

Shell integrated state president Cederic Cremers said: "We judge Aphrodite remains an charismatic improvement accidental and volition play an important relation successful supporting determination vigor needs.

"Our determination to exit is driven by disciplined superior allocation and portfolio choices, arsenic we absorption connected opportunities that fortify our integrated LNG [liquefied earthy gas] worth chain."

Shell stated that it maintains a important beingness successful Egypt and considers the state important to its operations.

The Aphrodite tract improvement program includes drilling 4 accumulation wells and operation of a floating accumulation portion to beryllium located successful the eastbound Mediterranean. It volition besides impact the installation of a subsea pipeline astir 250km successful magnitude to link the tract to Egypt's state transmission network.