Shell has agreed to sell its wholly-owned subsidiary BG Cyprus Ltd to Hungary's MOL Group for $720 million, as the UK-based supermajor sharpens its focus on the LNG value chain and continues a broader program of divesting non-core upstream positions.

Shell announced the agreement on Friday, stating that the sale of BG Cyprus — which holds a 35% non-operated interest in Cyprus Offshore Block 12 — remains subject to customary adjustments and milestone-linked contingent payments.

Block 12 contains the Aphrodite gas field, discovered in 2011 and estimated to hold approximately 4.5 trillion cubic feet of natural gas. The field is operated by Chevron's local subsidiary. Following the transaction, Chevron, MOL, and NewMed Energy will serve as the field's co-owners and will work toward a final investment decision on developing Aphrodite. All gas potentially produced from the field is expected to be sold to the Egyptian Natural Gas Holding Company (EGAS).

Shell originally acquired its 35% non-operated interest in Aphrodite through its purchase of BG Group in early 2016.

Cederic Cremers, Shell's Integrated Gas President, said the company's exit from the asset reflects a broader strategy of capital discipline. "Our decision to exit is driven by disciplined capital allocation and portfolio choices, as we focus on opportunities that strengthen our integrated LNG value chain," Cremers said.

Gas discoveries offshore Cyprus have attracted growing interest from international oil majors in recent years, as both Cyprus and neighboring Greece position themselves as potential energy hubs for gas supply to European markets. The push takes on added significance as European nations continue efforts to diversify gas supply sources following the disruption of Russian pipeline imports.

For MOL Group, the acquisition marks a notable expansion of its upstream portfolio in the Eastern Mediterranean, a region where the Hungarian company has been seeking to grow its international production base.

In a separate milestone this week, Eni and TotalEnergies took the final investment decision to develop the Cronos gas field in deep waters offshore Cyprus. The project marks Cyprus's first hydrocarbon development, with first gas expected to reach market in 2028. Cronos was discovered in 2022 and successfully appraised in 2024, representing Eni's inaugural development in the country.

Gas from Cronos will be transported and processed at existing facilities tied to Egypt's Zohr field before being transferred and liquefied at Egypt's Damietta LNG plant for export to international markets, primarily in Europe.

Source: OilPrice.com. Shell's official announcement is available here.