Shell produces 175,000 bpd in the region
Shell has vowed to return over £5bn to its shareholders having sold out of one of the biggest oil fields in America.
The FTSE 100 oil giant agreed to offload its operations in the Permian Basin to ConocoPhillips for $9.5bn.
The move comes after Shell has deliberated over its strategy having mad promises to reduce its emissions on pressure from campaign groups.
The Permian basin produces in the region of 175,000 barrels per day, which means the decision represents a fork in the road for Shell.
The company confirmed it will use $7bn for “additional shareholder distributions”, while the rest will be used to prop up its balance sheet.
The deal remains subject to approval by regulators.
Shell remains one of the largest energy companies in the world and produced approximately 3.4m barrels of oil per day last year.
Wael Sawan, Shell’s upstream director, commented: “After reviewing multiple strategies and portfolio options for our Permian assets, this transaction with ConocoPhillips emerged as a very compelling value proposition.
“This decision once again reflects our focus on value over volumes as well as disciplined stewardship of capital. This transaction, made possible by the Permian team’s outstanding operational performance, provides excellent value to our shareholders through accelerating cash delivery and additional distributions.”
The Shell share price is up by 3.65% during the morning session on Tuesday.
