Shell to sell Cyprus unit for up to $720 million as it focuses on LNG
Shell's Strategic Divestment and LNG Focus
Sale of BG Cyprus Unit to MOL Group
July 31 (Reuters) - Shell said on Friday it had agreed to sell its BG Cyprus unit to Hungarian oil and gas firm MOL Group for up to $720 million, as the British oil major sharpens its focus on LNG operations.
Details of the Cyprus Offshore Block Transaction
BG Cyprus' 35% non-operated interest in a Cyprus Offshore block, home to the Aphrodite gas field in the eastern Mediterranean, will be controlled by MOL upon the expected 2027 completion of the deal.
Shell's Rationale for the Exit
"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," Shell’s Integrated Gas President Cederic Cremers said in a statement.
Shell's LNG Expansion and Market Strategy
Shell has been seeking to expand its LNG portfolio to capitalise on rising global demand for the fuel and on Thursday said it will take a final investment decision on its Canada LNG project phase 2 by the end of 2026.
Stakeholders in the Aphrodite Gas Field
The Aphrodite gas field, located in an exclusive economic zone off the coast of Cyprus, is operated by Chevron's Cypriot unit with a 35% stake, while BG Cyprus and Israel's NewMed Energy hold 35% and 30% non-operating interests, respectively.
History of BG Group's Involvement
BG Group, which was bought out by Shell in 2016, had acquired the Aphrodite interest in 2015 through its Cyprus unit.
Shell's Financial Performance and LNG Business
Shell announced on Thursday that its net profit more than doubled from last year to $9.84 billion in the second quarter, beating expectations, helped by higher energy prices and increased market volatility during the Middle East conflict.
Integrated Gas Business Results
Profits from Shell's integrated gas business, which includes the world's biggest LNG trading desk, comfortably beat expectations at $2.7 billion, 55% above last year's despite its gas production falling 31% quarter-on-quarter.
(Reporting by Prerna Bedi in Bengaluru and Stephanie Kelly in London; Editing by Subhranshu Sahu and Joe Bavier)
