Shell sells $3.5b stake in Wood­side

The Daily Telegraph (Sydney) - - Business Daily - JOHN DAGGE DEALS

EN­ERGY gi­ant Royal Dutch Shell has sold out of Wood­side Petroleum for $3.5 bil­lion, end­ing a more than 30-year pres­ence on the regis­ter of the na­tion’s largest stand-alone oil and gas pro­ducer.

Shares in Wood­side slumped by more than 3 per cent yes­ter­day af­ter Shell con­firmed it had sold its fi­nal 13.3 per cent stake in Perth­based Wood­side.

Shell moved to sell off 8.5 per cent of its Wood­side stake on Mon­day but de­cided to off­load its en­tire hold­ing fol­low­ing stronger than ex­pected de­mand from in­sti­tu­tional in­vestors.

It sold out at $31.10 a share, a 3.5 per cent dis­count to Mon­day’s clos­ing price.

Wood­side chief Peter Cole­man said the com­pany would con­tinue to have a close work­ing re­la­tion­ship with Shell, point­ing out the global en­ergy gi­ant re­mained a part­ner in its North West Shelf and Browse projects off the coast of Western Aus­tralia.

The duo are also part­ners in the stalled Sun­rise de­vel­op­ment in the Ti­mor Sea.

“Wood­side’s strong and long­stand­ing re­la­tion­ship with Shell will con­tinue fol­low­ing today’s di­vest­ment,” Mr Cole­man said. “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.”

The sale is the lat­est un­der­taken by Shell which launched a $US30 bil­lion as­set sales pro­gram fol­low­ing its ac­qui­si­tion of the ri­val BG Group in 2015.

Shell part­nered with Wood­side in the early 1960s to de­velop the North West Shelf oil and gas ven­ture, pro­vid­ing its Aus­tralian part­ner with the tech­ni­cal skills needed to de­velop one of the na­tion’s largest-ever re­source projects.

It has been look­ing to sell out of Wood­side for a num­ber of years, clas­si­fy­ing the stake as “avail­able for sale” in its 2016 ac­counts. Its de­ci­sion to pull the trig­ger on its lat­est and fi­nal sale fol­low’s Wood­side’s share price climb­ing more than 11 per cent over the past three months.

“This sale is an­other step to­wards the com­ple­tion of our three-year, $US30-bil­lion di­vest­ment pro­gram, which is an im­por­tant part of our strat­egy to re­shape Shell, to de­liver a world-class in­vest­ment case, and to strengthen our fi­nan­cial frame­work,” Shell chief fi­nan­cial of­fi­cer Jes­sica Uhl said.

“Pro­ceeds from the sale will con­trib­ute to re­duc­ing our net debt.”

Shell has twice sought to take over Wood­side, team­ing with BHP to make its first play in the mid-1980s.

It launched a sec­ond bid to take over Wood­side in 2000 with the $10 bil­lion of­fer timed to take ad­van­tage of an Aussie dol­lar that was trad­ing about the US50c mark.

For­mer trea­surer Peter Costello re­jected the of­fer amid con­cerns the north­west shelf as­sets would be starved of at­ten­tion if they be­came part of Shell’s vast global port­fo­lio.

Wood­side ran the na­tion’s only liq­ue­fied nat­u­ral gas plant at the time. Shell sold an­other 10 per cent in late 2010, net­ting it $3.3 bil­lion. Shares in Wood­side closed at $31.20.

Tom Daunt, CEO of ALDI Aus­tralia. Pic­ture: Britta Cam­pion

Peter Cole­man.

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