Shell sells Canada oil sands assets

March 10, 2017 | 10:00

(0) user say

LONDON: Royal Dutch Shell has sold almost all of its Canadian oil sands activities in a US$7.25-billion (€6.9-billion) deal, the Anglo-Dutch energy giant said on Thursday (Mar 9).

Shell and Canadian Natural will jointly purchase Marathon Oil Canada Corporation, which holds a 20 per cent interest in the Athabasca project, from an affiliate of Marathon for US$1.25 billion each. (AFP/Carl COURT)

Shell said in a statement that it has signed agreements to sell its interests in two oil sands projects, Athabasca and Peace River, to Canadian Natural Resources Limited for US$8.5 billion in cash and stocks.

At the same time, Shell and Canadian Natural will jointly purchase Marathon Oil Canada Corporation, which holds a 20 per cent interest in the Athabasca project, from an affiliate of Marathon for US$1.25 billion each.

Shell will therefore receive a net US$7.25 billion in the vast transaction, which is subject to regulatory approvals and pegged for completion in mid-2017.

The deal is part of a huge US$30-billion divestment plan as Shell streamlines its portfolio following the blockbuster takeover of rival BG Group last year.

“This announcement is a significant step in re-shaping Shell's portfolio in line with our long-term strategy," said Chief Executive Ben van Beurden in Thursday's statement.

"We are strengthening Shell's world-class investment case by focusing on free cash flow and higher returns on capital, and prioritising businesses where we have global scale and a competitive advantage such as integrated gas and deep water."

AFP

What the stars mean:

★ Poor ★ ★ Promising ★★★ Good ★★★★ Very good ★★★★★ Exceptional