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Shell courts buyers for its Permian assets

Bloomberg reports that potential suitors have been invited to consider purchasing Shell’s assets in the US Permian Basin, which largely drove the resurgence in US oil production in recent years and is currently responsible for about half of all US oil-field activity.

World Oil has reported that, according to people familiar with the matter, but who asked not to be identified, Shell has invited representatives from a number of companies to look at information on the assets, including Chevron, the owner of the Texaco lubricant brand, which also has its own operations in the Permian Basin.

The move follows a recent decision by a Dutch court that meant Shell needed to accelerate its medium-term emission cuts. Despite signalling its intention to appeal the decision, Shell committed to speeding up its planned decarbonisation timetable.

At the same time, there is a push among investors for US shale operators to consolidate operations within each basin to improve operational efficiency. Diamondback Energy Inc., for example, made two deals last year aimed at enlarging its Permian presence. Speaking at the Hart Energy conference at Fort Worth in July, Diamondback’s Chief Financial Officer, Matthew Kaes Van’t Hof, said:

“Consolidation is important, it’s going to keep happening. There’s going to be a few large basin champions in each basin, majors included.”

The news fits with the overall strategies of some European majors as they move more toward renewable energies. For example, Equinor ASA recently agreed to sell its assets in the Bakken field to Grayson Mill Energy, while BP sold its Alaskan business to Hilcorp Energy Co.

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