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Shell stokes up its fire sale

Screen Shot 2014-06-23 at 11.37.41Introduction by John Donovan

Bloomberg is reporting that Shell has agreed to sell its stake in the Bijupira and Salema fields in Brazil. This development is no doubt in response to the collapse in oil prices and is stoking up the fire sale instituted by CEO Ben van Beurden when Shell announced a profits warning a year ago.

Extract from Bloomberg article

Royal Dutch Shell Plc (RDSA), the second-largest oil operator in Brazil, is selling a stake in one of its oil-producing projects in the country to HRT Participacoes em Petroleo SA (HRTP3), two people with knowledge of the matter said.

HRT, based in Rio de Janeiro, agreed to buy Shell’s 80 percent stake in the Bijupira and Salema fields, an offshore venture that started production in 2003, the people said, asking not to be identified because the deal hasn’t been made public. HRT will boost production to more than 30,000 barrels a day with the purchase, one of the people said.

Shell doesn’t comment on market speculation, it said in an e-mailed response.

For Shell, declining output in Brazil as reservoirs fade has increased the cost of extracting the remaining crude…

Shell is the biggest operator in the country after state-run Petroleo Brasileiro SA and has spent more than $7 billion on exploration and production in Brazil since 1998, according to the company’s website.

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