Carlyle’s unit Assala Energy Holdings Ltd. will also take on $285 million of debt from Shell’s Gabon unit and will make an additional payment of as much as $150 million depending on production performance and commodity prices. The transaction will also result in Shell taking a $53 million impairment charge this quarter, the company said in a statement Friday.
Shell is about two-thirds of the way through its divestment target, due to be completed by the end of next year. The money from the sales will be used to pare down debt taken to fund its record purchase of BG Group Plc last year. It sold $7.25 billion of oil sands assets in Canada this month and offloaded a large chunk of U.K. North Sea positions in January. It is also planning to sell fuel stations and a refinery in Argentina.
The sale in Gabon “is consistent with Shell’s strategy to concentrate our upstream footprint where we can be most competitive,” Andy Brown, director for the upstream business, said in the statement. “Shell will continue to pursue opportunities in sub-Saharan Africa.”
The transaction is subject to conditions including various approvals and is expected to close in the middle of this year.
Carlyle will buy all of Shell’s onshore oil and gas operations and related infrastructure in Gabon. These include five operated fields, interests in four others, a pipeline system and an export terminal, according to the statement. Shell’s share of production from the fields was about 41,000 barrels of oil equivalent a day in 2016.
Shell’s trading unit will retain the rights to take the oil for the next five years, according to the statement. The company will continue to hold licenses for two blocks located off Gabon’s coast.
Assala Energy will be funded by Carlyle International Energy Partners, a $2.5 billion fund, and Carlyle Sub-Saharan Africa Fund, which has $698 million under management, according to a separate statement.
“Assala Energy will invest responsibly to secure and increase production levels as well as oilfields’ life,” David Roux, Assala Energy’s chief executive officer, said in the statement. “We are committed to ensuring long-term, sustainable growth and creating value.”