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The London Free Press: Shell Canada products, assets forecast stable

Tue, April 3, 2007
By CP
 
CALGARY — Royal Dutch Shell remained discreet on the future of Shell Canada projects after announcing yesterday its success in acquiring 99 per cent of the Canadian subsidiary’s shares.

Few analysts foresee any shifts in direction, as Royal Dutch Shell had already been majority owner of Shell Canada’s oil and natural gas assets, refineries in Alberta and Ontario and more than 1,600 gasoline stations.

“They’ve been running it as if it were their company with a minority tag-along,” said Tom Ebbern, an analyst with Tristone Capital Inc.

“It’s hard to believe they were approving projects to build if they didn’t believe those were the best to spend money on.”

Shell Canada, one of the major integrated oil companies in the country, has the controlling interest in the Athabasca Oil Sands Project, which is undergoing an $11.2-billion expansion.

It also is a partner in the proposed Mackenzie gas pipeline project, expected to cost more than $16 billion.

Royal Dutch Shell owned 78 per cent of Shell Canada before its buyout bid launched late last year. Shareholders accepted after the international energy giant sweetened the pot to $45 a share in January, up from $40.

There are no compelling reasons to get rid of assets such as its natural gas plays in Western Canada just when they’re becoming more productive and commodity prices are on the uptick, said analyst Randy Ollenberger of BMO Capital Markets.

“They bought the assets to develop them, so I don’t think there are any reasons to believe they are going to stop spending money in Canada or to reduce staff levels,” he said.

Shell Canada will be delisted from the Toronto Stock Exchange by the end of May, becoming a wholly owned subsidiary of Royal Dutch.

It employs 4,800 people across Canada.

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