Shell Sells Stake In Brazil Oilfield To Qatar For $1 Billion

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Estimated Price
1BB
Description

To buy 23% holding in the Paque das Conchas field offshore Brazil.

Royal Dutch Shell Plc (NYSE: RSD-A, RSD-B) said Jan. 29 it will sell part of its stake in an oilfield off Brazil to Qatar Petroleum International Ltd. for about $1 billion, part of its campaign to divest assets including the Houston-to-Houma crude oil pipeline, fuel-refining and marketing assets in Australia and Norway and oilfields in Nigeria.

Europe's largest oil company may also exit its investment in Woodside Petroleum Ltd. and some shale assets in the U.S. Shell plans to sell about $15 billion in assets to offset record spending and meet its $130 billion net capital- expenditure target for 2012-2015.

Shell's agreement with Qatar sells a 23% holding in the Parque das Conchas field, or BC-10, to Qatar’s state-run energy company. It will retain a 50% stake and will continue to operate the field, The Hague-based Shell said.

“The transaction continues the growing stream of announcements relating to planned and potential divestments by the company,” Lucas Herrmann, a London-based analyst at Deutsche Bank AG, wrote in an e-mailed report.

Shell and its BC-10 partner, Oil & Natural Gas Corp. of India, in December increased their holdings in the field by buying out Petroleo Brasileiro SA for $1.64 billion and pre- empting a third-party bid. The Anglo-Dutch company, which issued its first profit warning in a decade this month, is selling assets to bring down its net investment in projects, after spending rose to a record $44 billion last year.

This is the second asset sale announced by Shell CEO Ben van Beurden, who took over from Peter Voser this year. His company last week agreed to exit the Wheatstone liquefied natural gas project in Australia by selling its interests for $1.14 billion to Kuwait Foreign Exploration Petroleum Co.

The BC-10 field is producing about 50,000 barrels of oil equivalent a day. The second phase of the project, adding 35,000 barrels at peak production, started in October. The final investment decision on the third phase was approved in July and will add 28,000 barrels a day at peak output, Shell said. The BC-10 partners in October agreed to increase their stakes in the venture by blocking Sinochem Group’s $1.54 billion bid for Petrobras’ 35% stake.