Shell will not be selling its Thai assets to Kuwait’s KUFPEC, as the two companies have mutually agreed to cancel the previously agreed deal.
The Anglo/Dutch oil giant on Wednesday said that its subsidiary, BG Asia Pacific, and KUFPEC Thailand , a subsidiary of Kuwait Foreign Petroleum Exploration Company (KUFPEC), had mutually agreed to cancel the Sale & Purchase Agreement for the share sale of Shell Integrated Gas Thailand Pte. Limited (SIGT) and Thai Energy Co Limited (TEC).
SIGT and TEC together hold a 22.222% equity stake in the Bongkot field and adjoining acreage offshore Thailand consisting of Blocks 15, 16 and 17 and block G12/48. Shell’s partners in the Bongkot asset are operator of the field, PTT Exploration & Production (PTTEP), with 44.445% equity, and Total with 33.333% equity.
The two companies had announced the sale and purchase agreement back in January 2017, saying the total value of the deal would be around $900 million. Shell had expected the sale to be concluded in the first quarter of 2017, however this did not happen.
In an email sent to Offshore Energy Today, a Shell spokesperson said: “Although Shell and the Thai government have worked together closely and collaboratively on the matter, the different interpretations of the treatment of share sale transactions were not resolved within Shell and KUFPEC’s agreed timeframe. Therefore, both parties jointly decided to terminate the transaction.
“We would like to thank the government for the time and attention they have given to the matter and we look forward to continuing our collaborative working relationship going forward.”
Support for PTTEP
Following the cancellation announcement on Wednesday, Shell said that its Thai subsidiaries would continue to support PTTEP in operation and further development of Bongkot.
SIGT also intends to participate in the forthcoming licensing round for the extension of the Bongkot concession, Shell said.
“Shell Group’s divestment program continues to make good progress at both raising cash and re-shaping the company. To date, the company has more than $25 billion in completed, announced or in progress divestments, on track to meet its target of $30 billion of divestments between 2016 and 2018,” Shell said.
To remind, Shell launched global $30 billion divestment program to simplify its portfolio following the acquisition of BG back in 2016.
Offshore Energy Today Staff