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Sept 20 (Reuters) - Royal Dutch Shell said on Monday it would sell its Permian Basin assets to ConocoPhillips for $9.5 billion in cash, an exit from the largest U.S. oilfield for the energy major shifting its focus to the renewable energy transition.

For ConocoPhillips, it is the second sizable acquisition in a year in the heart of the U.S. shale industry, as American and European producers diverge in whether to focus on hydrocarbons going forward.

ConocoPhillips concurrently announced it would tighten its targets for cutting greenhouse gas emissions, an acknowledgement of heightened focus on climate considerations by investors and society.

ConocoPhillips is acquiring around 225,000 net acres, as well as over 600 miles of associated infrastructure, according to its statement announcing the transaction. This builds on its existing portfolio of 750,000 net acres in the Permian.

Shell will return $7 billion of the proceeds to shareholders as dividends on top of existing commitments, with the rest going to pay down debt, it said. Conoco also announced it would increase quarterly cash payments to shareholders by 7% from Dec. 1.

Shell is one of the world's largest oil companies, all of which are under pressure from investors to reduce fossil-fuel investments to help reduce global carbon emissions and fight climate change.

Selling the Permian assets also will leave Shell's U.S. operations almost entirely in the offshore Gulf of Mexico. It sold its Appalachian gas assets last year.

Its remaining presence is a joint venture in California with Exxon Mobil Corp, although Reuters reported in July that Shell was marketing its stake for sale.

Reuters first reported in June that Shell had put up for sale its assets in the Permian, the shale formation stretching across Texas and New Mexico that accounts for around 40% of U.S. oil production.