Sector News

Shell nets £6bn from selling off Canadian oil sands venture

March 9, 2017

Royal Dutch Shell will sell all of its undeveloped oil sands interests in Canada and reduce its stake in a joint venture in the country.

Shell said it would cut down its share in the Athabasca Oil Sands Project from 60pc to 10pc as it announced the latest step in its divestment plan.

The series of transactions will result in a net consideration of $7.25bn (£6bn), and the company’s chief executive said it was a “significant step in re-shaping Shell’s portfolio”.

The company will sell its interest in the Athabasca project to a a unit of Canadian Natural Resources, one of the largest independent crude oil and natural gas producers in the world.

The same company will also be taking all of Shell’s Peace River Complex in-situ assets and a number of undeveloped leases in Alberta.

Under a second agreement, Shell and Canadian Natural will jointly acquire and own equally Marathon Oil Canada, which holds a 20pc interest in the Athabasca project, from an affiliate of Marathon Oil for $1.25bn each.

The transactions are expected to close in mid-2017, subject to regulatory approvals.

Chief executive Ben van Beurden said: “This announcement is a significant step in re-shaping Shell’s portfolio in line with our long-term strategy.

“We are strengthening Shell’s world-class investment case by focusing on free cash flow and higher returns on capital, and prioritising businesses where we have global scale and a competitive advantage such as Integrated Gas and deep water.

“The proceeds will accelerate free cash flow and reduce gearing and make a meaningful contribution to Shell’s $30bn divestment programme.”

Analysts at RBC Capital said: “This is the largest divestment announced to date under Shell’s $30bn divestment plan, which now stands at c$20bn.”

Source: The Telegraph

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