Shell sells $3.5b stake in Woodside
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