Royal Dutch Shell has sold its onshore oil and gas interests in the central African nation of Gabon for $587 million to private equity firm Carlyle Group, it said Friday.
The Anglo-Dutch energy giant announced in a statement that it has sold the assets to Carlyle for the equivalent of 544 million euros in a deal expected to complete in mid-2017.
Carlyle will also take on debt of $285 million as part of the deal. It will make extra payments up to a maximum of $150 million depending on production performance and commodity prices.
Shell will however retain exploration licences for two offshore blocks west of Gabon, a company spokesman added.
"Shell is very proud of the strong legacy we have built in Gabon over the past 55 years," said Upstream Director Andy Brown in the statement.
"The decision to divest was not taken lightly, but it is consistent with Shell's strategy to concentrate our upstream footprint where we can be most competitive. Shell will continue to pursue opportunities in Sub Saharan Africa.
"Together with recent divestments in the UK, Gulf of Mexico and Canada, this transaction shows the clear momentum behind Shell's $30-billion divestment programme, and it helps us to high-grade and simplify our upstream portfolio following the acquisition of BG."
The downstream business includes refining, marketing and distribution, while upstream comprises exploration and production.
Friday's sale is part of a huge $30-billion divestment plan as Shell streamlines its portfolio and cuts debt following the vast takeover of rival BG Group last year.
"I think it illustrates management's ongoing success of pivoting the company toward a more sustainable future, and their commitment to normalising debt levels," Cantor analyst David Donnelly told AFP.
"It's notable that the disposals tend to be focused on mature, oil based assets, thereby boosting the prominence of natural gas within Shell’s portfolio, particularly following the BG deal."