Shell share price: Oil major divests Gabon onshore assets

Group in talks to sell San Francisco refinery as part of massive disposal programme

Shell share price: Oil major divests Gabon onshore assets

Royal Dutch Shell (LON:RDSA) has sold its Gabon onshore assets, the company has said. The potential sale is part of the group’s massive disposal programme, with oil major looking to offload $30 billion worth of assets in the wake of its tie-up with BG Group. In other news, the group is in talks to sell its refinery outside of San Francisco, but is reluctant to give up its last asset in California, Reuters has reported.

Shell’s share price has been steady in London this morning, having inched 0.02 percent to 2,098.00p as of 08:32 GMT, in line with the broader market, with the benchmark FTSE 100 index currently 0.02 percent better off at 7,342.46 points. The group’s shares have gained more than 25 percent over the past year, but have given up more than six percent in the year-to-date.

Shell announced in a statement this morning that it had reached an agreement with Assala Energy Holdings, a portfolio company of The Carlyle Group, to sell 100 percent of its Gabon onshore interests for $587 million.Closing is expected in mid-2017.

“Shell is very proud of the strong legacy we have built in Gabon over the past 55 years. The decision to divest was not taken lightly, but it is consistent with Shell’s strategy to concentrate our Upstream footprint where we can be most competitive. Shell will continue to pursue opportunities in Sub Saharan Africa,” Andy Brown, Shell’s Upstream Director, said in the statement. “Together with recent divestments in the UK, Gulf of Mexico and Canada, this transaction shows the clear momentum behind Shell’s $30bn divestment programme, and it helps us to high-grade and simplify our upstream portfolio following the acquisition of BG.”

In a separate development, people with knowledge of the matter told Reuters this morning that while Shell is in talks with several potential buyers for its refinery outside of San Francisco, the company is reluctant to part with its last asset in California. Bidders for the 158,000 barrel-per-day Martinez refinery include PBF Energy and NTR Partners III LLC.

The sources explained that that the Anglo-Dutch company wanted to sell the asset for a higher price, with one saying that the plant could be valued at about $900 million. Shell, which barred potential buyers from hiring advisors during a first round of the auction, has reportedly since allowed third parties to review materials related to a sale.

Shell has been looking to offload $30 billion worth of assets in an effort to shore up its balance sheet in the wake of its acquisition of BG Group and a drop in crude prices which is squeezing energy groups’ profits.

As of 09:02 GMT, Friday, 24 March, Royal Dutch Shell Plc 'A' share price is 2,089.50p.

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