Shell sells further stake in Woodside for US$1.7bn

Article by Helen Tunnicliffe

Shell has sold two-thirds of its remaining stake in Woodside Petroleum to two unnamed investment banks for US$1.7bn.

The stake, of 71.6m shares, represents 8.5% of the total issued capital of Woodside. The sale is expected to complete on 14 November, following which Shell Energy Holdings Australia will retain a 4.8% interest in Woodside.

“This sale is another step towards the completion of our three-year US$30bn divestment programme, which is an important part of our strategy to reshape Shell, to deliver a world class investment case, and to strengthen our financial framework. Proceeds from the sale will contribute to reducing our net debt,” said Shell’s chief financial officer, Jessica Uhl.

The divestment programme came as a result of Shell’s takeover of BG Group in early 2016. The company has previously said that it wants to focus on chemicals and deepwater oil production. However, in recent years, Shell has repeatedly reduced its stake in Woodside. In 2010, it sold a 10% stake in the company, taking its holding down to 24.27%. Following a dividend reinvestment programme by Woodside which Shell decided not to participate in, Shell’s holding went down to 23.08%. In June 2014, Shell sold a further 78.27m shares, reducing its holding to 13.58% which fell to 13.28% after another dividend reinvestment programme that Shell did not participate in.

Woodside chief executive Peter Coleman told Australian media: “Woodside’s strong and long-standing relationship with Shell will continue following today’s divestment. Shell remains a key joint venture partner in the North West Shelf project and Browse. Woodside will maintain a close working relationship with Shell – as a joint venture partner and customer of Shell technology – and we recognise that Shell will always be part of our history.”

Article by Helen Tunnicliffe

Senior reporter, The Chemical Engineer

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