DEA approves Noreco’s acquisition of Shell’s Danish assets for $1.9bn

Danish Energy Agency (DEA) has approved Norwegian Energy Company (Noreco)’s proposed acquisition of Shell’s Danish upstream assets for $1.9bn.

Under the agreement signed last October, Shell agreed to sell its shares in Shell Olie-og Gasudvinding Danmark (SOGU) through its affiliate Shell Overseas Holdings.

SOGU owns a 36.8% non-operating interest in the Danish Underground Consortium (DUC).

Noreco’s wholly owned subsidiary Altinex will acquire 100% of the shares in SOGU and become the indirect owner through SOGU of a 36.8% stake in DUC.

This includes a 36.8% interest in the DUC facilities, as well as interconnecting pipelines.

Altinex will also get a 100% interest in Shell Olie-og Gasudvinding Denmark Pipelines (SOGUP) and a 36.8% direct interest in the 8/06 Area B License, including its corresponding entitlement to hydrocarbons won and saved under the licence.

The company will also earn an 18.4% interest in the Lulita Field unitisation and operations.

For many years, Noreco held a 10% interest in the Lulita Field. Following the deal, its interest in the field will increase to 28.4%.

The company will now work towards closing the acquisition by the end of next month.

The approval by DEA is subject to guarantees from Noreco on behalf of SOGU and SOGUP towards the Danish state for obligations in respect of licence 8/06, area B and the Tyra West – F3 gas pipeline to be acquired.

It is also subject to secondary liability declarations from Shell towards the Danish state for SOGU’s 36.8% ownership in DUC and SOGUP’s 41.4% ownership in the pipeline.