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Shell a ‘happy’ Woodside shareholder: CEO

The Sydney Morning Herald

November 27, 2009 – 6:58AM

Royal Dutch Shell, Europe’s largest oil company, has no plans to sell a 34 per cent stake in Woodside Petroleum, Chief Executive Officer Peter Voser said.

”We are a happy shareholder,” Voser said in an interview in Zurich today. ”It is a long-term objective for us to be a key strategic player in the gas market in Asia and also in Australia and Woodside is part of that thinking. Long-term means very long-term in our view.”

BHP Billiton, the world’s largest mining company, may be interested in buying Woodside with Shell’s approval, the Australian Financial Review’s reported on Nov. 24. Shell is among producers involved in liquefied natural-gas projects in Australia, in an attempt to tap Asian demand for cleaner-burning fuels.

Woodside’s CEO Don Voelte said yesterday the company isn’t for sale. Former treasurer Peter Costello blocked a $US3.2 billion ($3.5 billion) bid by Shell in 2001 to take control of Woodside, citing national interest.

Shell is reviewing the future of its refineries worldwide as it seeks to reduce costs after the global recession curbed demand for fuel and dragged down prices. Shrinking profit margins have prompted refiners to idle and sell plants and slow operating rates.

Refinery sales

Shell is in exclusive talks to sell the Stanlow refinery in the UK, as well as the Hamburg and Heide refineries in Germany, to Essar Oil Ltd.

”These are ongoing negotiations and I think I can say I am pleased with the progress,” Voser said. ”Let us continue to finish those discussions.” The exclusivity of the negotiations ends Nov. 30, though Voser declined to say whether a deal would be agreed by then.

The Hamburg refinery can process 110,000 barrels of oil a Day, while Heide has a capacity of 91,000 barrels, according to data compiled by Bloomberg. Stanlow, Britain’s second-largest refinery, can process 233,000 barrels a day.

Oil companies are slashing costs, shedding jobs and holding back on some new investments to halt a slide in earnings caused by the recession. The Hague-based Shell is cutting 5,000 jobs, or about 5 per cent of its workforce, and has reduced operating costs by about $US1 billion.

Voser said he is doubtful about the prospects of a recovery which is being driven mostly by economic stimulus packages rather than by consumer demand. ”I remain very skeptical that we will see a lot of progress in the early part of 2010.”

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