Woodside Stake May be Split if Shell Sells Out
LONDON, Dec 25 (Reuters) - Royal Dutch Shell's 23.1 percent stake in Australian oil and gas group Woodside Petroleum is seen as more likely to be split up and/or sold to institutional shareholders than to go in one piece to a strategic buyer, bankers said.
The holding, worth about $6.4 billion and left over from Shell's abortive attempt to acquire Woodside in 2001, has long been viewed as non-core to Shell.
This year, the Anglo-Dutch company promised to accelerate asset sales to reflate a narrowing cushion between cash inflow and investment spending.
Reuters was unable to verify Shell's intentions for the stake. Shell and Woodside declined to comment on its future.
Bankers say the holding is an obvious selloff candidate for incoming Chief Executive Ben van Beurden, who takes the job on Jan. 1 and will offer strategy pointers on Jan. 30 along with fourth-quarter results.
However, they say, other investor-owned international oil companies big enough to buy it are also in selloff mode.
Meanwhile, a strategic buyer such as one of China's top oil companies or the national oil companies (NOCs) of gas-hungry countries such as India or Thailand might be put off by Shell's experience with the Australian government when it tried to take full control of Woodside in 2001.
"Bidder-wise, it's a tricky one," one banker said.
"The deal is big enough to require a review by the government, and although Woodside is not as important as it was at the time when Shell's bid was blocked, it is still the largest independent oil company in Australia, so I don't think the Chinese NOCs would be welcome."
The banker suggested Middle Eastern or Southeast Asian sovereign wealth funds might be interested, but said Shell probably would not find a buyer among them for the entire stake and would have to sell in small blocks.
The banker predicted Shell would exit via a combination of strategic sales, market placements and probably a share buyback by Woodside.
A second banker said the stake as a single block had been "shopped" to a number of potential strategic buyers without result, and predicted the shares would be spread in the market among institutional investors.
Long History
Shell's interest in the plentiful offshore gas under Australia's northwest shelf dates back decades and remains strong through its Prelude floating liquefied natural gas (FLNG) project, which will draw gas from below the seabed and process it on board the world's largest vessel.
The company built a 34 percent holding in Woodside as part of that interest. Shell also became, and remains, a partner in the Woodside-operated Browse LNG project, which is set to use Prelude FLNG technology.
In 2001, Shell's attempt to increase its Woodside holding to a majority was blocked by the Australian government on the grounds that the move might slow gas development in Australia.
The country is set to become the world's biggest LNG exporter later in the decade, overtaking Qatar, as a number of major LNG projects come to fruition.
Shell sold a third of its Woodside holding in 2010, reducing that 34 percent stake to the 23.1 percent it holds now.
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Weatherford CEO's Rebound Plan Relies On Getting Smaller
- Iran Says Oil Market Is Too Tight For US Zero Exports Target
- China's Squeezed 'Teapots' Eye Petchem Path To Riches
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds
- Falcon Oil Declares Commercial Flow Test Results for Shenandoah Well
- Macquarie Strategists Expect Brent Oil Price to Grind Higher
- Japan Failing to Meet Corporate Demand for Clean Power: Amazon
- UK Oil Regulator Publishes New Emissions Reduction Plan
- Pennsylvania County Joins List of Local Govts Suing Big Oil over Climate
- PetroChina Posts Higher Annual Profit on Higher Production
- McDermott Settles Reficar Dispute
- US, SKorea Launch Task Force to Stop Illicit Refined Oil Flows into NKorea
- Russian Navy Enters Warship-Crowded Red Sea Amid Houthi Attacks
- USA Commercial Crude Oil Inventories Increase
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- Oil Demand Outpaces Expectations, Testing Calculus on Peak Crude
- House Passes Protecting American Energy Production Act
- TotalEnergies Restarts Production in Denmark's Biggest Gas Field
- USA Oil and Gas Job Figures Jump
- Republican Lawmakers Say IEA Has Abandoned Energy Security Mission
- Blockchain Demands Attention in Oil and Gas
- Houthis Warn Saudi Arabia of Retaliation If It Backs USA Attacks
- Macquarie Sees USA Oil Production Exiting 2024 at 14MM Barrels Per Day
- Summer Pump Prices Set to Hit $4 a Gallon Just as Americans Hit the Road
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- Chinese Mega Company Makes Major Oilfield Discovery
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Another Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Vessel Sinks in Red Sea After Missile Strike
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Equinor Makes Discovery in North Sea
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension