Home' Trinidad and Tobago Guardian : February 2nd 2017 Contents Royal Dutch Shell Plc, looking to pare debt swol-
len by last year's acquisition of BG Group Plc,
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 US$4.7 billion.
The disposals include the sale of about half
the company's North Sea oil and gas assets for as much as
US$3.8 billion to Chrysaor Holdings Ltd, Shell said. Earlier
Tuesday, Europe's largest oil producer agreed to sell its stake
in an offshore Thai gas field to a unit of Kuwait Petroleum
Corp for US$900 million.
Shell piled up borrowings following its biggest-ever ac-
quisition, the US$54 billion purchase of BG, and needs to hit
disposal targets to stave off credit rating reviews and maintain
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.
"The sale helps Shell focus on newer growth projects in the
North Sea and gives away smaller, older fields and this makes
it more focused," said Iain Armstrong, a London-based analyst
with Brewin Dolphin Ltd, which owns oil company shares. "It's
money in the bank for Shell which helps reduce debt. They
are well on their way to meet the big $30 billion target now."
Shell had almost US$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.
"This deal shows the clear momentum behind Shell's global,
value-driven US$30 billion divestment program," Chief fi-
nancial 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."
The deal with Chrysaor includes an initial consideration
of US$3 billion and a payment of up to US$600 million be-
tween 2018 and 2021 subject to commodity prices, with po-
tential further payments of up to US$180 million for future
discoveries. Shell retains a fixed liability of $1 billion for any
decommissioning costs associated with the North Sea assets,
the company said.
"Shell clearly wanted to be seen to make a material disposal
but also this vehicle has been structured to be a UK champion,"
Chrysaor CEO Phil Kirk said on a conference call. "We are
looking at the top spot in the UK."
Kirk said Chrysaor is looking at further acquisitions in the
North Sea as more production assets become available.
"We are looking at growth and activity," he said. "This is not
about cost cutting. This is not about winding down."
The package of assets consists of Shell's interests in Buzzard,
Beryl, Bressay, Elgin-Franklin, J-Block, the Greater Armada
cluster, Everest, Lomond and Erskine, plus a 10 per cent stake
in Schiehallion, Shell said. The fields represent total production
of about 115,000 barrels of oil equivalent in 2016, compared
with the company's total North Sea output of 211,000.
The deal with Chrysaor is subject to partner and regulato-
ry approvals, with completion expected in the second half of
2017. Shell will provide Chrysaor with as much as US$400
million of junior debt financing. The transaction's effective
date is July 1, 2016.
Bank of America Corp advised Shell on the deal, while BMO
Capital Markets was financial adviser to Chrysaor.
Shell sold its 50 per cent stake in a petrochemical joint ven-
ture in Saudi Arabia to Saudi Basic Industries Corp for US$820
million earlier this month. It's also considering a sale of its
stake in a Malaysian liquefied natural gas export plant, which
could fetch more than US$1 billion, people familiar with the
matter said in October.
FEBRUARY 2 • 2017 guardian.co.tt BUSINESS GUARDIAN
ENERGY | BG9
Halliburton asks workers from
banned countries not to travel to US
Halliburton Co has advised workers
from the countries named in President
Trump's immigration ban not to travel
to the US, according to an email from a
The US President on Friday announced
a four-month hold on allowing refugees
into the United States and a temporary
ban on travelers from seven Muslim-ma-
The Halliburton employees from the
banned countries are being notified that
travel to the US is not advisable during
the travel restriction period, the spokes-
Bloomberg on Monday reported about
Halliburton's advice to workers from
restricted countries against traveling
to the US.
The ban affects travelers with pass-
ports from Iran, Iraq, Libya, Somalia,
Sudan, Syria and Yemen and extends to
green card holders who are legal perma-
nent residents of the United States.
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