MUSCAT: Royal Dutch Shell, looking to pare debt swollen by last year’s acquisition of BG Group, accelerated its drive to shed assets on Tuesday by agreeing to the sale of fields in the North Sea and Thailand for as much as $4.7 billion.
The disposals include the sale of about half the company’s North Sea oil and gas assets for as much as $3.8 billion to Chrysaor Holdings, Shell said. Earlier on Tuesday, the company agreed to sell its stake in an offshore Thai gas field to a unit of Kuwait Petroleum Corp. for $900 million.
Shell piled up borrowings following its biggest-ever acquisition, the $54 billion purchase of BG, and needs to hit disposal targets to stave off credit rating reviews and maintain dividend payouts. While Chief Executive Officer Ben van Beurden has made debt reduction a top priority, Shell missed its target for asset sales last year as low oil prices depressed valuations.
“This deal shows the clear momentum behind Shell’s global, value-driven $30 billion divestment program,” Chief Financial Officer Simon Henry said in the statement. “It is also consistent with Shell’s strategy to high-grade and simplify our portfolio following the acquisition of BG.”
Shell rose 0.3 per cent to 2,252 pence as of 9:14am in London trading, paring the stock’s loss to 4.3 per cent this year.
Shell had almost $78 billion of net debt at the end of September. Net debt to capital, also called gearing, was at 29.2 per cent compared with 12.7 per cent a year earlier, and is among the highest for European oil companies.
