(New throughout, adds details and background)
By David French
Sept 20 (Reuters) - Royal Dutch Shell said on
Monday it would sell its Permian Basin assets to ConocoPhillips
for $9.5 billion in cash, an exit from the largest U.S.
oilfield for the energy major shifting its focus to the
renewable energy transition.
For ConocoPhillips, it is the second sizable acquisition in
a year in the heart of the U.S. shale industry, as American and
European producers diverge in whether to focus on hydrocarbons
going forward.
ConocoPhillips concurrently announced it would tighten its
targets for cutting greenhouse gas emissions, an acknowledgement
of heightened focus on climate considerations by investors and
society.
ConocoPhillips is acquiring around 225,000 net acres, as
well as over 600 miles of associated infrastructure, according
to its statement announcing the transaction. This builds on its
existing portfolio of 750,000 net acres in the Permian.
Shell will return $7 billion of the proceeds to shareholders
as dividends on top of existing commitments, with the rest going
to pay down debt, it said. Conoco also announced it would
increase quarterly cash payments to shareholders by 7% from Dec.
1.
Shell is one of the world's largest oil companies, all of
which are under pressure from investors to reduce fossil-fuel
investments to help reduce global carbon emissions and fight
climate change.
Selling the Permian assets also will leave Shell's U.S.
operations almost entirely in the offshore Gulf of Mexico. It
sold its Appalachian gas assets last year.
Its remaining presence is a joint venture in California with
Exxon Mobil Corp, although Reuters reported in July that
Shell was marketing its stake for sale.
Reuters first reported in June that Shell had put up for
sale its assets in the Permian, the shale formation stretching
across Texas and New Mexico that accounts for around 40% of U.S.
oil production.
(Reporting by David French in New York and Arathy S Nair in
Bengaluru; Editing by Anil D'Silva and David Gregorio)
