Royal Dutch Shell (LON:RDSA) is retaining ownership of its A/S Dansk Shell venture, the Anglo-Dutch oil major has said. The news comes after the Anglo-Dutch oil group inked a deal back in September 2016 to sell the assets as part of its massive divestment programme.
Shell’s share price has slipped into the red in London in today’s session, having given up 0.63 percent to 2,464.50p as of 14:02 GMT. The decline is largely in line with losses in the broader UK market, with the benchmark FTSE 100 index currently standing 0.58 percent lower at 7,643.34 points.
Shell to retain ownership of A/S Dansk Shell
Shell announced in an email today that its agreement signed with Dansk Olieselskab AS (DO) in September 2016 regarding the sale of A/S Dansk Shell had terminated and the sale would not complete. As a result, A/S Dansk Shell, which consists of the Fredericia refinery and local trading and supply activities, will remain under the FTSE 100 group’s ownership and continue business as usual.
Shell has been looking to offload $30 billion of assets to shore up its balance sheet in the wake of BG Group’s acquisition. The company, however, reassured investors that its divestment programme remained on track to complete this year, with deals worth $23 billion completed, $2 billion announced and $5 billion in advanced progress.
RBC weighs in on Anglo-Dutch group
In a separate development, Royal Bank of Canada reaffirmed Shell as its top pick in the Big Oil sector, with an ‘outperform’ rating and a price target of 2,800p.
“Shell’s outlook to the early 2020s has been clearly laid out, and now it’s down to management to deliver new growth volumes and improve cash generation consistently,” the broker’s analyst Biraj Borkhataria commented, as quoted by Proactive Investors. “We see Shell’s capex profile shifting from the upstream towards downstream/chemicals over the next few years, which suggests a broadly flat upstream production profile.”