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HOUSTON — Royal Dutch Shell on Monday sold oil and gas production at Permian Basin, the largest American oil field, to ConocoPhillips for $9.5 billion in cash.

The deal marked a turning point for Shell, which has since worked hard to develop the 225,000 acres of land. Buy from Chesapeake Energy nine years ago it increased its production to about 200,000 barrels per day.

The sale is the latest sign that Shell, like other European oil companies, is under pressure to sell its oil and gas production and shift to producing cleaner energy in response to growing concerns among investors and the general public about climate change.

Shell pulls out of the Permian as American shale oil production recovers. The field delivered 4.7 million barrels per day in August—more than 40 percent of total American oil production, and an increase of nearly 400,000 barrels per day from January. Rising oil prices have convinced crews to return to areas where they use hydraulic fracturing (commonly known as fracturing) to blast shale rocks and expel oil from the ground.

A wave of acquisitions began in the Permian with the onset of the coronavirus pandemic last year as companies try to cut costs. The scale of the Shell deal looks like this: Conoco’s acquisition of Concho Resources For $9.7 billion in October, a deal that makes Conoco a key player in the Permian connecting Texas and New Mexico. In April, Pioneer Natural Resources acquired DoublePoint Energy for $6.4 billion.

By acquiring Shell’s land, Conoco consolidates its position as the top Permian producer along with Pioneer, Occidental Petroleum, Exxon Mobil and Chevron.

The sale of Shell’s West Texas Permian holdings, which last year provided an estimated 6 percent of the company’s global oil and gas production, had been anticipated for months. Shell recently sold its stake in offshore oil and gas fields in Malaysia and the Philippines. American operations include offshore production in the Gulf of Mexico along with refineries.

Shell has been talking about reducing emissions since 2017 and has accelerated its transition to cleaner fuels over the past two years, though not enough to satisfy many environmentalists. In addition to its goal of net zero emissions by 2050, it has set a goal of reducing oil production by up to 2 percent per year by 2030 through divestments and lower investments in exploration and production.

“We are very excited to expand our position in one of the best watersheds in the world,” said Ryan M. Lance, CEO of Conoco. He hailed the deal as “a unique opportunity to add premium assets.”

Shell said it viewed the deal as a “compelling value proposition”.

“This decision once again reflects our focus on value over volumes,” said Wael Sawan, Shell’s upstream director. said when explaining the deal. He said Shell is reviewing multiple strategies and options for the Permian field.

Shell said the cash proceeds from the transaction would provide $7 billion in funding for “energy transition” efforts, alongside distributions to shareholders.

Shell plans to increase its investments in renewable energy and low carbon technologies to around 25 percent of its budget by 2025.

At least some of the money from asset sales goes to Shell’s energy businesses, including EV plug-in points, battery businesses and utilities. Shell announced this week that it plans to build a biofuel plant in the Netherlands to produce cleaner diesel and aviation fuel using used cooking oil and animal fat waste.

At least part of Shell’s disposal of its hydrocarbon assets is Dutch court decision In May, he ordered the company to reduce greenhouse gas emissions by 45 percent compared to 2019 levels by 2030, before the pandemic slashed oil and gas demand. Shell is appealing the decision.

When Shell or other oil companies sell a field or petrochemical plant, this does not automatically mean that global emissions will decrease, as other companies routinely undertake production.

Inside a new article Shell’s CEO, Ben van Beurden, wrote on LinkedIn that if Shell stopped selling transportation fuels, “it wouldn’t help the world one bit” because “people would fill their cars and delivery trucks at other service stations.”

Shell, like the entire oil and gas industry, has been through a difficult late period. The pandemic forced the company to cut its dividends last year. However, with oil and gas prices recovering, the company bounced back. solid profitabilityreported earnings of $5.5 billion in the second quarter, up from $638 million a year earlier

stanley reed contributing reporting.