Shell sells Cyprus unit up to $720 Million as it focuses more on LNG

Shell announced on Friday that it had agreed to sell BG Cyprus to the Hungarian oil-and-gas firm MOL Group, for a price of up to $720m. The British oil major is now focusing on its LNG operations.

MOL will control BG Cyprus' non-operated 35% interest in a Cyprus Offshore Block, which is home to the Aphrodite Gas Field in the Eastern Mediterranean. The deal should be completed in 2027.

Shell's Integrated Gas president?Cederic Crémers stated in a press release that "our decision to exit was driven by disciplined Capital Allocation?and Portfolio Choices, as we focused on opportunities that strengthened our integrated LNG Value Chain."

Shell is looking to 'expand its LNG Portfolio' in order to capitalize on the rising global demand for this fuel. On Thursday, it announced that it would make a final decision about its Canada LNG Project phase 2 investment by the end 2026.

Aphrodite, located in a zone of exclusive economic activity off the coasts of Cyprus, was?operated with a 35% share by Chevron Cypriot, while BG Cyprus held 35%, and Israel's NewMed Energy 30%, respectively.

BG Group, bought by Shell in 2016, acquired Aphrodite's interest in 2015 via its Cyprus unit.

Shell announced Thursday that it had surpassed expectations by doubling its net profit from last year, to $9.84 Billion in the second quarter. This was due to higher energy prices, and the increased volatility of the market during the Middle East conflict.

Shell's integrated gas business, including the world's largest LNG trading desk, comfortably beat expectations with $2.7 billion. This is 55% higher than last year despite Shell's gas production dropping 31% quarterly.

(source: Reuters)