Shell kicks off its turnaround with asset sale

 
Suzie Neuwirth
ROYAL Dutch Shell yesterday said it has agreed to sell its stakes in a gas project in Western Australia, as it looks to streamline its portfolio in the wake of Friday’s profit warning.

The FTSE 100-listed oil major is selling minority stakes in two related gas projects to the Kuwait Foreign Petroleum Exploration Company (KUFPEC) for $1.135bn (£690m).

The deal raises KUFPEC’s stake in the project to 13.4 per cent.

Chief executive Ben van Beurden, who took over the reins from Peter Voser at the start of the year, said that Shell would remain “a major player in Australia’s energy industry” but the firm is “refocusing its investment” to improve its capital efficiency.

On Friday, the Anglo-Dutch company warned that fourth-quarter earnings, due to be published on 30 January, would be “significantly lower” due to current oil and gas prices and the challenging European refining market.

It said earnings would be $2.9bn, down from $5.6bn in the same quarter the previous year. “Our 2013 performance was not what I expect from Shell,” said Van Beurden. “Our focus will be on improving Shell’s financial results, achieving better capital efficiency and on continuing to strengthen our operational performance and project delivery.”

Shell has continued to offer high dividends and share buybacks, to soothe investors from the sting of a number of disappointing quarterly updates.

It is embarking on multi-billion pound divestment plan this year, as Van Beurden looks to turn around the company. Shares closed flat yesterday.

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