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Shell sells £700m of natural gas assets to Kuwait

Screen Shot 2013-10-01 at 07.56.54Chief executive says disposal of stakes in two Australian businesses, which follows shock profit warning last week, is evidence of ‘hard choices’ being taken

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By 9:24AM GMT 20 Jan 2014

Royal Dutch Shell has sold its stakes in two Australian natural gas businesses to Kuwait’s state energy giant.

The company announced on Monday the $1.135bn (£691m) disposal of its 8pc interest in the Wheatstone-Iago joint venture and 6.4pc in the Wheatstone liquefied natural gas (LNG) project in Western Australia to the Kuwait Foreign Petroleum Exploration Company (KUFPEC), a subsidiary of the Gulf state’s national oil company.

Ben van Beurden, who recently took over from Peter Voser as chief executive, said Shell was “refocusing our investment to where we can add the most value with Shell’s capital and technology”.

The sale comes after the oil and gas giant’s massive investment in LNG under Mr Voser and his predecessor Jeroen van der Veer.

The rise of shale gas in the US, as well as higher than expected costs, has made LNG projects somewhat less lucrative in recent years. The Australian dollar has also weakened, lowering returns on Shell’s businesses Down Under.

Despite the sale, Mr van Beurden stressed that “Shell will remain a major player in Australia’s energy industry”.

“We are making hard choices in our world-wide portfolio to improve Shell’s capital efficiency,” he added.

The sale comes after Shell warned on Friday that full-year profits would be “significantly lower” than expected, sending shares down 1.2pc. They fell another 0.9pc on Monday morning.

Mr van Beurden is expected to reveal his long-term plan for further asset disposals when he presents full-year results next week.


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