Sector News

Mitsui buys 20 percent stake in Shell's offshore oil fields in Gulf

December 8, 2016
News

Japanese trading house Mitsui & Co said on Monday it has agreed to buy a 20 percent stake in four blocks in the U.S. offshore oil and gas fields in the Gulf of Mexico from Royal Dutch Shell Plc for an undisclosed amount.

The move follows Mitsui’s other investment decisions earlier this year including co-development of the Greater Enfield oil reserves off Western Australia and an $8 billion expansion of the Tangguh liquefied natural gas project in Indonesia which is led by BP, taking advantage of the recent drop in commodity prices.

In its latest deal, Mitsui Oil Exploration Co will buy the 20 percent stake in four blocks in the Mississippi Canyon, located about 100 kilometers south-southeast of New Orleans, in the Gulf from a Shell subsidiary.

The recoverable resources of all the blocks are estimated to be more than 100 million barrels of oil equivalent, worth about $5.1 billion based on the current West Texas Intermediate crude futures price of about $51 a barrel.

Production of crude oil and gas would utilize the existing near field infrastructure, which could help early commercialization at lower development costs, the company said.

Production could start as early as 2019, a Mitsui spokesman said.

By Yuka Obayashi

Source: Reuters

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