Royal Dutch Shell (LON:RDSA) is negotiating the sale of its stake in a Venezuelan oil joint venture to Paris-based Maurel & Prom as it looks to scale down its crude business, Reuters has reported. The news comes after the Anglo-Dutch energy giant recently decided to invest in a multibillion-dollar liquefied natural gas project in western Canada.
Shell’s share price has been little changed in London this morning, and as at 08:56 stood at 2,485.00p, flat in percentage terms. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.39 percent higher at 7,034.39 points. The group’s shares have added a little over eight percent to their value over the past year, as compared with about a near seven-percent drop in the Footsie.
Shell looks to sell Venezuela JV stake
Sources with knowledge of the matter told Reuters this week that Shell was seeking to sell its 40 percent stake in Petroregional del Lago, a joint venture with Venezuela’s state-run oil company PDVSA in the western state of Zulia near Colombia. The potential sale is reportedly being analysed by Venezuela’s Oil Ministry.
The sources noted, however, that in the last few weeks a disagreement with Venezuela had emerged over a fee called an entrance bonus that Maurel & Prom would have to pay to the government, as required by Venezuelan law, to gain access to the field’s reserves. They added that the negotiations are currently on hold.
Analysts on Anglo-Dutch energy group
Barclays reaffirmed Shell as an ‘overweight’ this week, without specifying a price target on the shares. According to MarketBeat, the blue-chip group currently has a consensus ‘buy’ rating and an average price target of 2,914.69p.