Reuters: Shell sells Australian oil fields (ShellNews.net) 11 March 2005
Fri Mar 11, 2005
MELBOURNE (Reuters) - Anglo-Dutch oil major Royal Dutch/Shell Group has sold its interest in the Laminaria and Corallina oil fields in the Timor Sea for $140.2 million (73 million pounds), saying it did not fit with the company's strategy.
Shell (RD.AS: Quote, Profile, Research)(SHEL.L: Quote, Profile, Research), which is seeking to raise up to $15 billion from asset sales by 2006 to focus on major exploration and production projects, said it remained committed to Australia and would still have significant upstream and downstream investments.
Shell sold its interest in the fields and associated infrastructure to project operator Woodside Petroleum (WPL.AX: Quote, Profile, Research), Australia's largest independent oil and gas producer, and Paladin Resources (PLR.L: Quote, Profile, Research).
"Australia is extremely important to Shell and the focus of Shell's upstream business in Australia is on the development of the large gas resources in which Shell has an interest," Chris Gunner, Shell Development Australia chief operating officer, said in a statement on Friday.
"Although it is a quality asset, Laminaria is a declining oil field and is therefore not a strong fit with this strategic direction either on gas or on our growth aspirations."
Shell has stakes in the North West Shelf liquefied natural gas (LNG.L: Quote, Profile, Research) development and the Gorgon LNG project, both off the coast of Western Australia.
Woodside, 34 percent-owned by Shell, said the transaction would increase its production by about 970,000 barrels of oil equivalent (boe) this year and 1 million boe in 2006.
Woodside said last month it was targeting output of 56.2 million boe this year. Last year, the fields produced a total 17.4 million barrels of oil compared with 31.7 million barrels in 2002.
Perth-based Woodside will buy an additional 16.67 percent stake in production licence AC/L5, which covers most of the Laminaria-Corallina project, lifting its total interest of 66.67 percent.
"We are keen to make further investments to increase production from the project as well as to pursue further opportunities in the area," Woodside CEO Don Voelte said.
Woodside already plans to drill an infill appraisal well in the Laminaria field in the second-quarter and an exploration well in the AC/P8 permit later in 2005.
Paladin Oil & Gas (Australia) Pty. Ltd., has agreed to buy Shell's remaining interest in AC/L5 and its 15 percent interest in the adjoining AC/P8 exploration permit for $46.87 million.
Its UK parent moved to place up to 13 million new shares to raise around 22.5 million pounds on Friday to help fund the acquisition. The new shares represent around four percent of its share capital, the company said.
Paladin also reiterated that its results for the year to December 31 would be in line with previous market guidance.
The deal is expected to close by April and is subject to approval by Australian regulatory authorities.
Woodside shares ended 0.3 percent down at A$23.61 on Friday trade in a weaker overall market. Paladin shares ended Thursday at 173-1/4 pence.