Royal Dutch Shell announced recently about a deal to sell Permian Basin assets to ConocoPhillips. ConocoPhillips is purchasing the West Texas business for $9.5 billion in cash. The assets span roughly 225,000 net acres with current production of about 175,000 barrels per day, the statement said. The sale is set to close in the fourth quarter this year.
Royal Dutch Shell deal would lay the foundation for the petroleum firm’s complete exit from onshore production in Texas. Shell will maintain its offshore production in Texas. This plan to sell the move comes as the oil industry faces increasing pressure to invest in renewable energy and lower its carbon emissions in the face of a changing climate.
The company has been working to cut emissions since 2017, and it has accelerated its shift to cleaner fuels over the last two years, although not enough to satisfy many environmentalists. In addition to a goal of net-zero emissions by 2050, it has set a target of reducing oil output up to 2 percent a year by 2030 through divestments and lower investments in exploration and production. Ryan M. Lance, Conoco’s chief executive said that they are very excited to enhance our position in one of the best basins in the world. He hailed the deal as a unique opportunity to add premium assets.