Shell bolsters renewables bet with stake in US solar firm

Bloomberg

Royal Dutch Shell Plc is investing in a US solar energy developer, continuing its recent expansion into the electricity business. The Anglo-Dutch oil and gas producer will acquire a 44 percent stake in Nashville’s Silicon Ranch Corp., which owns and operates about 100 solar facilities across the US. The investment could be as high as $217 million in cash, depending on the company’s performance, mak-ing Shell the largest shareholder, according to a statement.
Shell has been growing its foothold in the power business as it prepares for a carbon-constrained world, including an agreement to purchase the U.K’s seventh-largest utility in December. Rivals BP Plc and Total SA have also expanding into offshore wind and solar in
the past few years, reflecting changing government incentives and
customer demands.
“With this entry into the fast-growing solar sector, Shell is able to leverage its expertise as one of the top three wholesale power sellers in the US, while expanding its global New Energies footprint,” Marc van Gerven, Shell’s vice president of solar, said in the statement.
Silicon Ranch currently has about 1.9 gigawatts of solar-based power facilities in its development portfolio, and the Shell investment will allow it to enter new markets, according to the company. It operates in 14 states, including New York and California. Shell is acquiring the stake from Partners Group, a Zug, Switzerland-based private markets investment manager. The deal is expected to close before the end of March.

NORTH SEA
The company made one of its biggest commitments to the North Sea in 30 years, with plans to redevelop the Penguins oil and gas field. The Anglo-Dutch oil major will build a floating production, storage and offloading vessel — its first new manned installation in almost three decades — to take output from eight wells it plans to drill. Peak production will be the equivalent of 45,000 barrels a day, with a break-even price of less than $40 a barrel, Shell said.
“It is another example of how we are unlocking development opportunities, with lower costs, in support of Shell’s transformation into a world class investment case,” Andy Brown, Shell’s upstream director, said in a statement.
Penguins, a joint venture between Shell and Exxon Mobil Corp., is already operational after first being developed in 2002. Oil from the field — about 150 miles (240 kilometers) northeast of the Shetland Islands — will be transported by tanker to refineries, while the gas will be sent by a pipeline to the St. Fergus terminal in Scotland.
Production in the North Sea has fallen by about two-thirds since its heyday in the 1990s as fields have depleted. The UK is making it easier to claim tax relief to encourage companies to apply new technology to extract oil and gas from fields previously considered too expensive and difficult to develop.
The UK Oil and Gas Authority said the redevelopment is “a vote of confidence” for the area. “We are expecting further high-value projects to move forward to sanction this year, which will help prolong UK production for many years,” Andy Samuel, OGA chief executive, said in a statement.