London - Royal Dutch Shell could look to sell $15 billion (R163bn) worth of assets over the next two years, including some North Sea oilfields, a media report said yesterday, expanding on its official guidance that divestments would accelerate this year.
Shell, whose new chief executive Ben van Beurden took over two weeks ago, would sell some of its North Sea oil fields, as well as parts of its refining portfolio and some early-stage projects, the Financial Times reported, citing a person close to the company.
The oil company, the world’s number three among investor-controlled energy companies, declined to comment on the report.
Shell and its peers in the industry are facing increasing pressure from their investors to hold down spending as costs increase and prospects for oil prices wane.
The Anglo-Dutch company said in October last year that it would step up divestments “significantly” this year and next year to keep cash flowing in, after forecasting that capital expenditure would peak at about $45bn last year.
Analysts and bankers say that some of the company’s Nigerian oil blocks plus Shell’s 23.1 percent stake in Australian group Woodside Petroleum – worth more than $6bn at current prices – could be put on the block.
“It wouldn’t surprise me if Shell were to sell some North Sea assets,” Santander analyst Jason Kenney said.
“In the North Sea, something like 80 percent of its production comes from 20 percent of its asset base so there’s a long tail of smaller positions,” he added.
Since Van Beurden began working alongside outgoing chief executive Peter Voser at the beginning of the fourth quarter last year, the company has cancelled plans to build a gas-to-liquids plant in the US, raising investor hopes of a tighter spending regime.
Kenney said that he expected the company under Van Beurden to focus on capital discipline, better returns and selling peripheral assets.
Van Beurden will face investors at the end of the month as the firm reports fourth-quarter results, and on March 13 at a planned investor day. - Reuters