ROYAL Dutch Shell is to sell off a package of North Sea assets for up to $3.8 billion (£3 billion) to smaller rival Chrysaor as it continues a divestment drive.
The oil giant's interests in Buzzard, Beryl, Bressay, Elgin-Franklin, J-Block, the Greater Armada cluster, Everest, Lomond and Erskine - plus a 10 per cent stake in Schiehallion - will all be offloaded as part of the deal.
Around 400 staff are expected to transfer to Chrysaor on their existing terms and conditions of employment.
Shell will pocket an initial $3 billion (£2.4 billion), followed by a payment of up to $600m (£480m) between 2018-2021 subject to commodity prices, with potential further payments of up to $180m (£144m) for future discoveries.
The company said it would record an "accounting gain" on the sale.
The assets pump out a total of 115,000 barrels of oil per day. Shell's total North Sea production during 2016 was around 211,000 barrels per day.
On completion of the deal Chrysaor, backed by private equity firm EIG, will become one of the largest producers of oil and gas in the UK.
Andy Brown, Shell's upstream director, said the firm remains committed to the North Sea.
"Shell has a long and proud history in the UK North Sea, to which we remain committed.
"This deal complements the great strides we have made over the last two years in improving the competitiveness of our UK upstream business.
"We believe this deal is a vote of confidence in the UK North Sea and offers proof that the industry's increasing competitiveness, and improvements to the fiscal and regulatory regime, are starting to produce positive results.
"It also contributes to the UK's goal of maximising economic recovery of oil and gas from the UK North Sea, which will continue to be a source of energy, and revenue, for the country for many years to come," he said.
Shell, which completed a $52.6 billion (£36.4 billion) acquisition of BG Group last year, is embarking on an ambitious cost-cutting drive and a £30 billion (£24.6 billion) divestment initiative.
Separately, Shell has struck a deal to offload its stake in its Bongkot gas field in Thailand for $900m (£720m) to of Kuwait Foreign Petroleum Exploration Company.
