THE BUSINESS (EU): Shell's sale plans hit resistance: “ROYAL Dutch/Shell's plan to sell $12bn (£6.5bn, €9.4bn) of assets to fund its recovery is stumbling in the face of opposition from local managers, according to a consultant working with the company.”: The source said: "There are big fights between the country managers and the exploration heads. There are all these assets being hawked around the market by bankers that the local managers don't really want to sell.": ""Shell has changed dramatically as a company. It's not the culture that I once knew..."  (ShellNews.net) 21 Nov 04

by Richard Orange

ROYAL Dutch/Shell's plan to sell $12bn (£6.5bn, €9.4bn) of assets to fund its recovery is stumbling in the face of opposition from local managers, according to a consultant working with the company.

The Business has learnt that plans to sell stakes in oil and gas fields in the North Sea and Pakistan have stalled, while a long-term plan to quit its New Zealand business has been postponed in the face of disputes with its partners. This comes on top of the decision earlier this year to cancel the sale of its Swedish petrol station business.

The source said: "There are big fights between the country managers and the exploration heads. There are all these assets being hawked around the market by bankers that the local managers don't really want to sell."

Bankers said Shell's sale of the Schooner and Ketch gas fields in the North Sea had stalled last week after Shell managers running the sale decided none of the bids was adequate. A banker said: "The initial process hasn't succeeded and there's a second round going on. They're having to go round asking people for higher bids."

Another banker said several bidders had dropped out because of the risks involved in the fields, which suffer production problems. The one or two bidders remaining are thought to have dropped their valuations of the Schooner and Ketch fields from £400m to as low as £150m after examining the data.

Shell had already been forced to postpone final bids for the stake by two weeks to give bidders longer to scrutinise the data.  

The bidding problem follows the cancellation of Shell's sale of its 28% stake in Pakistan's Bhit gas field, which The Business understands Shell has pulled after deciding that none of the bids was high enough.

Sources in New Zealand told The Business that Ajit Bansal, Shell's commercial manager for the country, had revealed privately that he had been appointed to sell the $1.5bn business, as he had done previously in Thailand. One of Shell's partners in New Zealand said: "He came with a remit to clean it up and sell it off. But they're not in a position where they can sell right now. There's too much acrimony with [Shell's partner in New Zealand] Todd Energy."

Richard Tweedie, managing director of Todd Energy, which partners Shell in the country, caused a sensation earlier this year when he laid into the company at a conference. He told The Business: "Shell has changed dramatically as a company. It's not the culture that I once knew and our partnership has certainly suffered."

But analysts said that even if several potential sales fail, it should still meet its $10-12bn target, given the value of power station joint venture Intergen, chemicals business Basell, and its global unit Petroleum Gas business, which are also on the block.