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Stealthy Shell sales could bag $10bn

The Sunday Times
February 14, 2010
Danny Fortson

PETER VOSER, chief executive of Royal Dutch Shell, is selling $10 billion (£6.4 billion) of assets as part of his drive to revitalise the oil giant.

North Sea oilfields are among the operations that are being offered discreetly to the multinational’s rivals.

Shell has hired Credit Suisse, the investment bank, to sell its $1 billion European liquefied petroleum gas (LPG) arm, which provides butane and propane used in heating and cooking. A behind-the-scenes auction of the network of petrol stations across at least 17 African countries is also moving forward. First-round bids of about $500m have been lodged.

These auctions come on top of a range of more advanced moves, including a $5 billion disposal programme for onshore fields in Nigeria, an exit from Sweden, and a $1.2 billion auction of three European refineries. Exclusive talks are under way with Essar, the Indian conglomerate, on the refinery sites, which include Shell’s only remaining UK refinery at Stanlow, Cheshire.

Shell has been tight-lipped about potential sales. However, sources close to it said that, including smaller disposals, the firm could raise a total of more than $10 billion.

The company is having to contend with serious challenges. Production fell last year even though it spent $30 billion on exploration. Earlier this month it reported a 75% drop in quarterly profits because of lower oil prices and the company’s huge cost base.

Shell employs more than 100,000 people in 100 countries. Voser has announced 6,000 job cuts and consolidated its operations since taking over last summer. He wants to speed up the move away from older, less profitable businesses.

Barclays has been dragged into the diplomatic row over oil drilling off the Falkland Islands. The bank owns 3.5% of Desire Petroleum, a London-listed oil firm that will this month drill the first new prospect off the disputed islands in more than a decade.

In a suit filed in Buenos Aires, an Argentine lawyer claims that, because Barclays failed to disclose its holding, it should be stripped of its role advising the government on a $20 billion debt deal.

Argentina claims ownership of the Falklands, and its foreign minister has said the drilling violates its national sovereignty. Last week the authorities blocked a Desire supply ship from leaving port. Two other British firms are planning to drill around the Falklands this year.


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One Comment

  1. Impoverishedpensioner says:

    More poor quality reporting – $30billion on Exploration last year – I doubt they spet that much on Exploration in the last decade

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