Shell has decided to divest its non-operating stake of 30% in the undeveloped Cambo oil and gas field in the UK North Sea field, said its partner Ithaca Energy.
In this connection, Ithaca Energy has inked an agreement with Shell’s subsidiary Shell U.K. to market the latter’s working interest in the asset. The marketing process will run for six months from the signing of the agreement.
Ithaca Energy holds an operating stake of 70% in the oil and gas discovery, located in the West of Shetland region, offshore Scotland. The stake was gained by Ithaca Energy via its acquisition of Siccar Point Energy last June.
Shell UK upstream senior vice president Simon Roddy said: “Following an internal review, we have decided to sell our 30% working interest in Cambo and have agreed a process with Ithaca Energy for the sale of Shell’s stake in the field this year.
“We wish Ithaca Energy well in the future development of the field, which will be important to maintain the UK’s energy security and to sustaining domestic production of the fuels that people and businesses need.”
According to Ithaca Energy, Cambo is the largest undeveloped oil and gas discovery in the UK portion of the North Sea. The offshore field is estimated to yield up to 170 million barrels of oil equivalent and 53.5 billion cubic feet of gas over 25 years.
In 2021, Shell pulled out from the Cambo oil field development citing the weak economics of the project at that time.
Ithaca Energy said that to progress the project towards a final investment decision (FID), various outcomes are possible under the agreement it signed with Shell. These include Shell selling a part or its entire working interest in the field.
If Shell does not divest its entire working interest, then the remaining portion of the stake, which is not sold to a third party, can be bought by Ithaca Energy.
Another option is if a potential buyer acquires the 30% stake and wants a greater share of equity in the Cambo oil and gas field, then Ithaca Energy will sell up to 19.99% of its stake.
Ithaca Energy said that it all scenarios of the sale process, the company will retain at least a 50% stake in the field, while continuing as the operator of the asset.
Ithaca Energy CEO Alan Bruce said: “Our agreement with Shell represents a meaningful step towards the development of Cambo, the second largest undeveloped field in the UKCS and a key asset in helping maintain the UK’s future energy security.
“Securing a new owner for Shell’s stake is an important step in Ithaca Energy progressing to Final Investment Decision. Ithaca Energy’s primary strategic focus is to maximise sustainable shareholder returns through the delivery of our BUY, BUILD and BOOST strategy, including the future development of Cambo.”
