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Shell To Divest Upstream Stakes In Ireland For Up To $1.23 Bln

Royal Dutch Shell plc (RDS-B,RDSB.L,RDSA.L,RDS-A) said Wednesday that through its affiliate Shell Overseas Holdings Limited has reached an agreement with CPP Investment Board Europe S.A.R.L. a wholly owned subsidiary of Canada Pension Plan Investment Board or "CPPIB", to sell its shares in Shell E&P Ireland Limited, that holds 45% interest in the Corrib gas venture for up to $1.23 billion or 1.08 billion euros.

The transaction includes an initial consideration of $947 million or 830 million euros and additional payments of up to $285 million or 250 million euros between 2018-2025, subject to gas price and production.

The transaction, which represents Shell's exit from the upstream business in Ireland, is subject to partner and regulatory consents and is expected to complete in the second-quarter of 2018. The transaction's effective date is January 1, 2017.

The Shell share of the Corrib gas venture's production represented approximately 27,000 barrels of oil equivalent/day in 2016.

Shell Energy Europe Limited or "SEEL" has signed an offtake agreement for some 40% of the Corrib gas venture's production for up to three years following completion.

CPPIB will be the new Corrib Gas JV partner and Vermilion will become the new operator of the Corrib Gas Venture.

The transaction will result in an impairment charge of around US$350 million, which will be taken in the second-quarter of 2017. At completion, a negative non-cash Cumulative Currency Translation Difference of around US$400 million will be released.

Shell noted that it will retain a presence in Ireland through its aviation joint venture, Shell and Topaz Aviation Ireland Limited based near Dublin airport.

by RTT Staff Writer

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