Shell to sell stakes in two Australian projects to Kuwait for $1.14 bn
20 Jan 2014
European oil giant Royal Dutch Shell today said that it will sell stakes in two gas projects in Western Australia to the Kuwait Foreign Petroleum Exploration Company (KUFPEC) for $1.14 billion (£693.3 million).
Shell will sell its 8 per cent stake in the Wheatstone-Iago Joint Venture and 6.4 per cent stake in the 8.9 million tonnes per annum Wheatstone liquefied natural gas (LNG) project in Western Australia.
Shell said that the sale to KUFPEC, an existing Wheatstone joint-venture partner, ensures there will be no impact on existing commercial agreements.
"We are making hard choices in our worldwide portfolio to improve Shell's capital efficiency," Shell's newly appointed chief executive Ben van Beurden, said in a statement.
The sale comes a few days after the London-listed energy group warned that full-year profits would be "significantly lower" than expected. (See: Shell warns of 'significant' drop in Q4 profits, takes market by surprise)
The warning came nearly 10 years to the day after Shell, the western world's third-biggest oil company, revealed the so-called reserves accounting scandal, when the group dramatically downgraded its reserves estimates.
Shell is under pressure from investors to sell non-core assets to focus on more profitable ventures and improve the company's financials.
The Wheatstone-Iago Joint Venture comprises the Wheatstone and Iago gas fields, located while the Wheatstone LNG Project - operated by Chevron, is one of Australia's largest LNG projects.
Earlier in 2001, Shell made an unsuccessful attempt to acquire Woodside, which was turned down by Australian regulators on national interest grounds.
Perth-based Woodside is the country's largest independent oil and gas company and the operator of Australia's North West Shelf project, which makes up about 40 per cent of the country's total gas and oil production. It is a public company listed on the Australian Securities Exchange (ASX).
Shell sold a 10-per cent stake in Woodside for $3.3-billion.