The Age (Australia): Woodside rises on Shell sell-off talk: “Woodside Petroleum shares shot back above $20 yesterday amid fresh speculation that major shareholder Royal Dutch-Shell may be looking to sell its $4.4 billion stake. The potential buyers could include China National Offshore Oil Corp, China's biggest offshore oil and gas company. Analysts said Shell was on a "divesting spree", lending credence to talk of a sale of its 34 per cent stake in Perth-based Woodside, which is valued at about $13.2 billion based on yesterday's closing price. (ShellNews.net) 23 Nov 04
By Michael Weir
Perth
November 23, 2004
Woodside Petroleum shares shot back above $20 yesterday amid fresh speculation that major shareholder Royal Dutch-Shell may be looking to sell its $4.4 billion stake.
The potential buyers could include China National Offshore Oil Corp, China's biggest offshore oil and gas company.
Analysts said Shell was on a "divesting spree", lending credence to talk of a sale of its 34 per cent stake in Perth-based Woodside, which is valued at about $13.2 billion based on yesterday's closing price.
A Shell spokesman said the company did not comment on market speculation.
But the Anglo-Dutch group has already said it wants to offload more than $15 billion in assets in the next two years and focus on major exploration and production projects to help win back investor confidence in the wake of January's scandal over inflated reserves.
Woodside shares rose as much as 47˘, or 2.4 per cent, to a one-month high of $20.17 before finishing 5˘ higher at $19.75.
"Even if true, the Australian Government's response will be interesting, given the history," Hong Kong-based Credit Suisse First Boston analysts Prashant Gokhale and Edwin Pang said of the speculation.
Three years ago, Shell's $14.20-a-share takeover bid for Woodside was blocked by the Federal Government on the grounds that it was not in the national interest because Woodside's key asset, a one-sixth stake in the giant North- West Shelf project, was one of Australia's most important resource assets.
Shell has previously made no secret of its desire to take full control of Woodside, but has readily admitted it has little prospect of success under existing Federal Government policy.
Perth-based analysts said China National Offshore Oil Corp was likely to find itself in a similar predicament to Shell if it tried to launch a takeover bid for Woodside after securing a major shareholding.
The Australian Government's response will be interesting, given the history. PRASHANT GOKHALE, EDWIN PANG, CSFBCSFB said China National Offshore Oil Corp could add value to Woodside's undeveloped gas reserves by providing access to the Chinese liquefied natural gas market and increasing the likelihood of gas fields in the Browse Basin and Timor Sea being developed.
Woodside has already developed close relationships with China National Offshore Oil Corp. Woodside and its five equal partners in the North-West Shelf, including Shell, have signed a $25 billion contract to supply liquefied natural gas to China.
As part of that deal, China National Offshore Oil Corp is taking a 5 per cent stake in the North-West Shelf gas reserves.
It also is taking a 25 per cent interest in a new joint venture that would own the gas to be processed and supplied to the Guangdong liquefied natural gas terminal.