Shell Sells Stake in Brazil Oilfield to Qatar for $1 Billion

Jan 29, 2014 12:47 pm ET

(Adds Qatar projects in eighth paragraph.)

Jan. 29 (Bloomberg) -- Royal Dutch Shell Plc, which plans to dispose of about $15 billion in assets, sold part of its stake in an oilfield off Brazil to Qatar Petroleum International Ltd. for about $1 billion.

Shell agreed to sell a 23 percent holding in the Parque das Conchas field, or BC-10, to Qatar’s state-run energy company. It will retain a 50 percent stake and will continue to operate the field, The Hague-based Shell said today in a statement.

“The transaction continues the growing stream of announcements relating to planned and potential divestments by the company,” Lucas Herrmann, a London-based analyst at Deutsche Bank AG, wrote in an e-mailed report.

Shell and its BC-10 partner, Oil & Natural Gas Corp. of India, in December increased their holdings in the field by buying out Petroleo Brasileiro SA for $1.64 billion and pre- empting a third-party bid. The Anglo-Dutch company, which issued its first profit warning in a decade this month, is selling assets to bring down its net investment in projects, after spending rose to a record $44 billion last year.

This is the second asset sale announced by Shell Chief Executive Officer Ben van Beurden, who took over from Peter Voser this year. His company last week agreed to exit the Wheatstone liquefied natural gas project in Australia by selling its interests for $1.14 billion to Kuwait Foreign Exploration Petroleum Co.

Buyers Sought

Shell, Europe’s largest oil company, is seeking buyers for its interest in the Houston-to-Houma crude oil pipeline in the U.S., fuel-refining and marketing assets in Australia and Norway, and for oilfields in Nigeria. It may also exit its investment in Woodside Petroleum Ltd. and some shale assets in the U.S.

The BC-10 partners in October agreed to increase their stakes in the venture by blocking Sinochem Group’s $1.54 billion bid for Petrobras’ 35 percent stake.

Shell, the biggest overseas energy investor in Qatar, is expanding its cooperation with the national oil company into Latin America. The partners already have natural gas and petrochemical projects in the Middle East and are examining a possible refinery construction in China.

The BC-10 field is producing about 50,000 barrels of oil equivalent a day. The second phase of the project, adding 35,000 barrels at peak production, started in October. The final investment decision on the third phase was approved in July and will add 28,000 barrels a day at peak output, Shell said.

The company expects to sell about $15 billion in assets to offset record spending and meet the $130 billion net capital- expenditure target for 2012-2015.

--Editors: Will Kennedy, Amanda Jordan, Ana Monteiro