Shell to sell working North Sea oil field

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The Independent Online
SHELL IS to break new ground by selling off a producing North Sea oil field as crude prices remain near their lowest levels in a decade.

The move to dispose of its 49 per cent stake in the Kingfisher field comes as another oil major, Texaco, postpones its Captain project in the UK North Sea.

Yesterday the critical Brent Blend price for October delivery was at $12.21. This was down from $12.28 on Monday as traders reacted negatively to suggestions that OPEC was not meeting its latest quota cuts.

Shell insisted that oil prices were only one of a number of considerations that dictated the sale. Malcolm Brinded, managing director of Shell UK Exploration and Production, said Kingfisher was "not an asset of strategic importance in our portfolio".

But analysts pointed out that Shell and its partner Esso had just spent pounds 220m bringing the field on stream late last year.

Shell admits it has never before sold a working field in the North Sea although it has bought and sold exploration acreage in the past.

Analysts said Shell had been criticised for not quickly disposing of less profitable assets. One energy specialist said: "Given that we have just seen Shell put up for sale its upstream interests in Thailand, this points to the company trying to become more proactive, as management has promised."

The sale of Kingfisher, which produces 30,000 barrels a day of oil and condensate plus gas, will not herald any job losses.

But Texaco's decision to put back the start-up of Captain is potentially more serious for Britain's hard-pressed offshore fabrication sector, which is desperate for work.

Texaco has told contractors that it will not sanction the project until early next year although it had intended to give the go-ahead this autumn. The company insists the move is not a result of low oil prices.

Like other oil companies Texaco is pulling in its horns in other parts of the world. It plans to close its offices in Kuala Lumpur, Malaysia.