Shell sells stakes in Austrian gas project for $1.14bn


LONDON: Royal Dutch Shell said on Monday it had agreed to sell stakes in a gas project in Western Australia for $1.14 billion (693.47 million pounds) as part of the oil company’s drive to improve return on investment. Shell is selling an 8 percent stake in the Wheatstone and nearby Iago gas fields and a 6.4 percent stake in the related Wheatstone liquefied natural gas (LNG) project to the Kuwait Foreign Petroleum Exploration Company (KUFPEC). The move raises KUFPEC’s holding in the Chevron-led LNG project, in which the state company is already a partner, to 13.4 percent. “We are making hard choices in our worldwide portfolio to improve Shell’s capital efficiency,” Shell chief executive Ben van Beurden, who took over two weeks ago, said in a statement. “We are refocusing our investment to where we can add the most value with Shell’s capital and technology,” he said, adding that the company would remain a major player in Australia’s energy industry. KUFPEC is focused on using OPEC member Kuwait’s oil wealth to diversify into energy projects abroad. Wheatstone, one of the super-sized Australian LNG projects due to come on stream over the next few years, is about 25 percent complete. With some 80 percent of its future production committed to Asian buyers, the project is scheduled to cost about $29 billion. Chevron expects capital spending on it to peak this year. Shell issued a ‘significant’ profit warning for the fourth quarter on Friday, in which it detailed across-the-board problems, less than three months after its third-quarter profits undershot analyst forecasts. Analysts and shareholders said the company’s weak results would push the world’s number-three investor-controlled energy firm to keep a tighter control on costs after it said 2013 capital expenditure would peak at about $45 billion. Since van Beurden began working alongside outgoing boss Peter Voser at the start of the fourth quarter, the company has cancelled plans to build a gas-to-liquids plant in the United States, raising investor hopes of a tighter spending regime. Shell is not the only big energy company facing increasing investor pressure to hold down spending as costs rise and prospects for higher oil prices wane.

comments powered by Disqus
  • DailyTimes.Official
  • DailyTimes_DT
  • Rss
Sunday Magazine