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UPDATE 2-Shell to divest Kaybob assets to Canada's Crescent Point for C$900 mln

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·2 min read
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(Adds executive comment, background)

Feb 17 (Reuters) - Royal Dutch Shell said onWednesday it would sell its Kaybob Duvernay assets in Alberta toCanada's Crescent Point Energy Corp for C$900 million($708.61 million), the latest divestiture in the North Americancountry by the European oil major.

Shell had earlier this month said its oil output peaked in2019 as it undertakes its largest overhaul yet to expandrenewables and low-carbon businesses under growing investorpressure to battle climate change.

The Anglo-Dutch company has been selling assets in Canada,exiting the oil sands business back in 2017, as the countrybattled years-long transportation bottlenecks and companiesshifted their focus to higher-value assets elsewhere.

"Divesting these assets underpins Shell's effort to focusthe upstream portfolio to deliver cash," said Wael Sawan,Shell's upstream director, adding that the sale allows it tofocus on core production assets like the prolific Permian Basinin Texas and New Mexico.

For Crescent, the assets add production of about 30,000barrels of oil equivalent per day in what it considers a'low-risk' play with key infrastructure and market accessalready in place, its chief executive officer, Craig Bryksa,said in a statement.

Crescent expects the deal to boost its cash generation andadd to its all per share financial metrics this year. Its NewYork-listed shares rose almost 20% after the bell.

The Canadian company will pay C$700 million in cash and 50million of its shares to acquire the Shell assets.

Separately, Ovintiv Inc also announced the sale ofits Duvernay assets on Wednesday to an unnamed buyer.

Formerly known as Encana and once Canada's largest company,Ovintiv last year moved its base of operations to the UnitedStates.

($1 = C$1.27)(Reporting by Rithika Krishna and Shariq Khan in Bengaluru;Editing by Bernard Orr and Maju Samuel)