SHELL PLANS: $15 BLN
Royal Dutch Shell has revived plans to dispose of its European liquefied petroleum gas business four years after a second failed attempt to sell the assets.
The Anglo-Dutch group has appointed Credit Suisse to advise on an auction, four people with knowledge of the decision said. The assets could be valued at as much as €1bn, including debt, and are expected to attract bids from private equity groups as well as trade buyers, they said.
Shell sought to offload the unit, the bulk of which consists of French company Butagaz, in 2004 but pulled the sale because offers fell short of its asking price. in 2010 a disposal plan coincided with a deepening of the eurozone's sovereign debt crisis.
The decision to start a new process highlights an improving dealmaking environment in Europe as the region's economy shows signs of healing, helping narrow the gap between buyers and sellers' price expectations.
Royal Dutch Shell declined to comment.
Under the key dictum of "fix or divest", Shell chief executive Ben van Beurden who started in his role at the start of this year, outlined a strategy that aims to improve returns through pruning Shell's portfolio of assets.
Although Shell's liquefied petroleum gas division in Europe has been on the chopping block for some time, the move coincides with the group's $15bn divestment programme for the next two years.
"This asset is part of Shell's downstream business, where returns are well below what Ben van Beurden wants to achieve," said Iain Reid, analyst at BMO Capital Markets. "The sale is obviously a part of the broader strategy to get rid of marginal value businesses."
Shell has sold poor performing US shale assets and North Sea oilfields as well as Nigerian assets that have been hit by rampant sabotage and oil theft. The company has underperformed the European oil and gas sector more broadly in the last year, leading to a string of disappointing quarterly results and concerns about how it allocates capital.
Shell's downstream business which includes its refineries, chemical plants, retail sites and trading arm generated earnings of $2.9bn in the first half of 2014, compared to $10.4bn in its upstream – or oil exploration and production – business.
John Abbot, head of the downstream business, said earlier this week he had embarked upon a "multiyear strategy" to improve financial performance, capital discipline and project delivery. "There are issues with the business that we need to address. It is not going to be fixed overnight," he said.
Buyout groups that had submitted bids for the unit in 2010 included Paris-based PAI Partners, London-based CVC Capital, Ardian, US-based First Reserve and Advent International.
|July, 16, 11:05:00|
|July, 16, 11:00:00|
|July, 16, 10:55:00|
|July, 16, 10:50:00|
|July, 16, 10:45:00|
|July, 16, 10:40:00|
AN - China National Offshore Oil Corp. (CNOOC) is willing to invest $3 billion in its existing oil and gas operation in Nigeria, the Nigerian National Petroleum Corporation (NNPC) said on Sunday following a meeting with the Chinese in Abuja.
REUTERS - Production at Libya’s giant Sharara oil field was expected to fall by at least 160,000 barrels per day (bpd) on Saturday after two staff were abducted in an attack by an unknown group, the National Oil Corporation (NOC) said.
IMF - Output grew by 3.8 percent in 2017, underpinned by a resilient non-hydrocarbon sector, with robust implementation of GCC-funded projects as well as strong activity in the financial, hospitality, and education sectors. The banking system remains stable with large capital buffers. Growth is projected to decelerate over the medium term.
IMF - Higher oil prices and short-term portfolio inflows have provided relief from external and fiscal pressures but the recovery remains challenging. Inflation declined to its lowest level in more than two years. Real GDP expanded by 2 percent in the first quarter of 2018 compared to the first quarter of last year. However, activity in the non-oil non-agricultural sector remains weak as lower purchasing power weighs on consumer demand and as credit risk continues to limit bank lending.