Shell Divests Assets Worth Rp13 Trillion, Why?

British energy giant Shell is once again restructuring its business portfolio by divesting strategic gas assets in the Eastern Mediterranean. This move comes as the company becomes increasingly aggressive in strengthening its position in the liquefied natural gas (LNG) market, where demand continues to rise globally.

According to Reuters, Shell has announced an agreement to sell its business unit in Cyprus, BG Cyprus, to the Hungarian oil and gas company MOL Group, in a transaction valued at up to US$720 million, or approximately Rp13 trillion.

The transaction will grant MOL control over the 35% non-operator stake held by BG Cyprus in one of the Cypriot offshore blocks, which hosts the Aphrodite gas field, a significant energy project in the Eastern Mediterranean region.

The completion of the transaction is expected to take place in 2027, subject to the fulfilment of all regulatory requirements and conditions.

Cederic Cremers, President of Integrated Gas at Shell, stated that the company’s decision to exit the project is part of a more disciplined capital allocation strategy. “Our decision to exit is driven by disciplined capital allocation and business portfolio choices, as we focus on opportunities that strengthen our integrated LNG value chain,” he said.

According to Shell, the company’s current focus is to increase its exposure to the global LNG business, which is viewed as having more attractive long-term growth prospects compared to several other conventional gas assets.