Shell Sheds Remaining Permian Basin Assets

Royal Dutch Shell is selling its Permian Basin assets to ConocoPhillips for $9.5 billion in cash, according to Reuters. This is an exit from the largest U.S. oilfield for the energy firm which is shifting its focus to a clean energy transition.

ConocoPhillips is acquiring around 225,000 net acres as well as more than 600 miles of associated infrastructure, the second sizable acquisition in a year, according to its statement announcing the transaction. This builds on its existing portfolio of 750,000 net acres in the Permian.

American and European producers are split over whether to focus on hydrocarbons going forward. The world’s largest oil companies are under pressure from investors to reduce fossil-fuel investments to help reduce global carbon emissions and fight climate change.

Europeans such as Shell and BP PLC have set targets to slowly move away from crude production while investing in non-fossil energy sources such as solar and wind power, while U.S. producers including Exxon Mobil Corp and Chevron Corp are doubling down on hydrocarbons.

Through the deal, ConocoPhillips sides with the latter, but concurrently announced it would tighten its targets for cutting greenhouse gas emissions, an acknowledgement of heightened focus on climate considerations, says Reuters.