Equinor announced on 13 May 2019 that it has opted to increase its 23.55% stake in Anadarko-operated Caesar-Tonga field to 46%, buying Shell Offshore Inc.âs 22.45% working interest in the asset for USD 965 million in cash. In exercising its right of first refusal, the Equinor deal negates the previous agreement made last month in which Delek CT Investment LLC, a subsidiary of Israelâs Delek Group Ltd., acquired Shellâs participating interest in the four-block, deepwater field complex for the same price. The Equinor transaction will have an effective date of 1 January 2019. Anadarko Petroleum Corporation, which is in the process of being acquired by Occidental Petroleum, owns a 33.75% working interest in the field and Chevron U.S.A. Inc. holds the remaining 20.25% stake. Caesar-Tonga lies in some 5,000 ft (1,500 m) of water covering Green Canyon blocks 683, 726, 727, and 770 in the Central Gulf of Mexico, about 125 miles (200 km) offshore Louisiana.  âWe are pleased to increase our presence in the US, one of our core areas. This is an asset we understand well, and our larger interest will deliver significant additional free cash flow from day oneâ, says Christopher Golden, Equinorâs senior vice president for Development and Production International, North America Offshore.  One of the most prolific properties in the deepwater US Gulf of Mexico, Caesar-Tonga was discovered in 2003 and came onstream in 2012 as a subsea tieback to Anadarkoâs nearby Constitution spar. It produces from subsalt Miocene-aged reservoirs deposited at a depth of about 24,500 ft (7,468 m). Since coming online, it has yielded over 100 MMbbl of oil equivalent (MMboe) from eight oil producers, with current total average production over 70,000 boe/d. The complex is estimated to hold 2P recoverable reserves of approximately 400 MMboe.  Background Information  Commenting on the original sale to Delek, Shellâs Upstream Director Andy Brown said, âThis transaction represents our continued focus on strategically positioning our deep-water business for growth and is consistent with our Upstream strategy of pursuing competitive projects that deliver value in the 2020s and beyond. The sale will contribute to Shellâs ongoing divestment program and allow us to direct resources to the areas where we see the most value in the longer term.â Shell is currently working on two major development projects in the deepwater US Gulf at Appomattox and Vito while actively appraising a potential giant oil discovery at its Whale prospect.   Asaf Bartfeld, President and CEO of the Delek Group, stated in April after making the ephemeral deal with Shell, âThis is a strategic opportunity, which provides the Group access to a producing oil asset with significant proven reserves, with a strong cash flow and partnership with leading players in the global energy market. This activity, alongside the oil and gas exploration activity we are carrying out in the North Sea and the Gulf of Mexico, gives added emphasis to the Group's position in the international energy market." Although the Caesar-Tonga acquisition fell through, Delek Group affiliate, Navitas Petroleum Ltd., holds equity stakes in 11 deepwater leases that include interest in three deepwater US Gulf fieldsâBuckskin, Shenandoah, and Yucatan North.
Equinor has disrupted Delek Group's planned US$965 MM agreement to buy Shell's stake in Caesar-Tonga oilfield asset by exercising its own preferential rights. Equinor has agreed to take over Shell's 22.45% interest. The asset is located 300 km SW of New Orleans and covers blocks GC683, GC726, GC727 and GC770 in DW of about 1500m.