Oil major Shell, through its affiliate A/S Norske Shell, has reached an agreement with OKEA AS to sell its entire 44.56% interest in Draugen and 12% interest in Gjøa in Norway for $556 million (NOK 4,520 million).

The transaction is subject to regulatory approval and is expected to complete in 4Q 2018, Shell said on Wednesday. The transaction's expected effective date is January 1, 2018. Upon completion OKEA will become the new operator of Draugen.

The decommissioning costs associated with the assets are currently estimated to be $120 million after-tax (NOK 1,000 million); Shell will retain 80% of this liability up to an agreed cap and OKEA will assume the remaining liability.

The Shell share of the assets' production amounted to approximately 25 kboe/d in 2017, representing about 14% of Shell's Norwegian production in 2017.

“This deal is part of Shell's global, value-driven $30bn divestment program and is consistent with our strategy to high-grade and simplify our portfolio,” said Andy Brown, Shell's Upstream Director.

“Shell has a long and proud history in Norway. We continue to have strategic, long-term positions in Troll and Ormen Lange and are actively seeking new growth opportunities.”

On completion, Draugen staff onshore and offshore are expected to transfer to OKEA with full continuity of service.

“We are pleased to have found a buyer with an experienced leadership team and with a business strategy that aligns very well with the opportunities offered by Draugen and Gjøa” said Rich Denny, Managing Director of A/S Norske Shell.

“We are happy that OKEA's ambition is to uphold and strengthen Draugen's footprint in mid-Norway. They will also be welcoming transferring staff in Kristiansund and Stavanger in order to leverage their substantial experience and competence for the safe and efficient operation of Draugen in the future. This deal is a good strategic move for both companies. Draugen has been a defining asset for Shell in Norway, and we are confident it will prove to be similarly important to OKEA as a springboard in further developing their operating capabilities on the Norwegian Continental Shelf.“

Shell noted it remains committed to Norway, operating Ormen Lange and Knarr and partnering in Troll, Valemon and Kvitebjørn. In addition, Shell is drilling two exploration wells on the Norwegian continental shelf this year.

Furthermore, A/S Norske Shell continues to be the Technical Service Provider of the Nyhamna Gas Processing Plant, and partner in the Norwegian full-scale CCS project and CCS test facility at Mongstad.

Also on Wednesday, Shell announced the sale of its 15% shareholding in Malaysia LNG Tiga to the Sarawak State Financial Secretary (SFS) for an agreed consideration of $750 million.