Shell (SHEL.US) plans to sell Cyprus assets for up to US$720 million, focusing on liquefied natural gas business

The Zhitong Finance App learned that Shell (SHEL.US) announced on Friday that it has agreed to sell its BG Cyprus subsidiary to the Hungarian oil and gas group MoL Group, with a transaction amount of up to 720 million US dollars. The move marks that the British energy giant is shifting its strategic focus further towards the liquefied natural gas (LNG) business.

BG Cyprus holds a 35% non-operating interest in the maritime block of Cyprus where the Aphrodite (Aphrodite) gas field in the Eastern Mediterranean is located. The deal is expected to close in 2027, when the relevant rights will be taken over by MOL.

Cederic Cremers (Cederic Cremers), president of Shell's integrated gas business, said in a statement: “Our exit decision stemmed from a strict and prudent capital allocation and asset portfolio optimization strategy aimed at concentrating resources on opportunities that can strengthen our integrated LNG value chain.”

In recent years, Shell has continued to expand its LNG asset portfolio to capture growing global demand for natural gas. The company revealed on Thursday that it plans to make a final investment decision on the second phase of the Canadian LNG project by the end of 2026.

The Aphrodite gas field is located within the exclusive economic zone on the coast of Cyprus. Chevron (CVX.US) Cyprus is the operator and holds 35% of the rights, while BG Cyprus and Israel's NewMed Energy hold 35% and 30% of the non-operating rights, respectively.

It is worth mentioning that BG Group was acquired by Shell in 2016, and its Cyprus subsidiary already obtained relevant interests in the Aphrodite gas field as early as 2015.