Shell’s Danish upstream exit delayed

The exit of supermajor Shell from Denmark has been delayed, pending the closing of the $1.9 billion deal with Norwegian Energy Company (Noreco), which has been temporarily held up.

Under the deal, announced last October, Noreco is due to take over Shell’s wholly owned subsidiary Shell Olie-og Gasudvinding Danmark (SOGU), which has a 36.8% non-operating interest in the Danish Underground Consortium (DUC).

DUC is operated by Total on 43.2% and produces most of Denmark’s oil and gas from hubs including Halfdan, Gorm, Dan and Tyra, which is currently undergoing a $3.3 billion redevelopment.

The consortium accounts for about 90% of Denmark’s oil and gas production.

In addition to the DUC stake, the sale includes a 41.4% share in the Tyra West-F3 gas pipeline, a 36.8% direct interest in the 8/06 Area B License, and an 18.4% holding in the Lulita Field in which Noreco already holds 10%.

However, Noreco said in a statement: “The closing of the acquisition … has been delayed due to an outstanding issue between the seller and the operator of DUC (concessionaire). Noreco expects closing to take place in July”.

No further details were provided.

Noreco previously said the deal will turn it into “a considerable E&P company” that will be “the second largest oil and gas producer in Denmark”.

Following the closing of the deal, Shell will retain some downstream activities in Denmark, including a refinery in the town of Fredericia.