By Shadia Nasralla
(Reuters) – Oil and gas producer Cairn Energy is shifting its focus to a growth portfolio onshore Egypt from declining offshore fields in the British North Sea in a flurry of deals worth around $1.5 billion which it announced on Tuesday.
Cairn, in partnership with Ceiron, agreed to buy onshore fields in Egypt’s Western Desert from Royal Dutch Shell for up to $926 million and sell its stakes in British fields Catcher and Kraken to private firm Waldorf Production for $460 million.
“We’re transitioning from that portfolio in decline into one where we see that we can build greater cashflow generation into the future,” Cairn Chief Simon Thomson told a conference call.
Cairn, which produced around 21,000 barrels per day (bpd) last year, can boost its net share from the Shell assets to 50,000 bpd from 35,000 bpd within a couple of years, Thomson added. The deal would triple Cairn’s reserves.
Cairn is also in talks with no set deadline with the Indian government about an arbitration award worth around $1.7 billion, but Cairn is actively pursuing alternatives, such as selling the consideration or enforcement, Thomson said.
(Additional reporting by Aniruddha Ghosh in Bengaluru, editing by Louise Heavens)