Shell to Sell Canadian Oil-Sands Business for $7.25 Billion
March 09 2017 - 3:17AM
Dow Jones News
By Ian Walker
LONDON-- Royal Dutch Shell PLC is selling its oil sands
interests in Canada in a two-part deal worth $7.25 billion, as part
of the oil major's plan to reshape the business.
In the first part of the deal, Shell will sell its 60% interest
in the Athabasca oil sands project, its 100% interest in the Peace
River complex in situ assets and a number of undeveloped oil sands
leases in Alberta, Canada, to a subsidiary of Canadian Natural
Resources Ltd. for $8.5 billion in shares and cash.
Secondly, Shell and Canadian Natural will jointly buy and
equally-own Marathon Oil Canada Corporation--which holds a 20%
interest in the Athabasca oil sands project--from Marathon Oil
Corp. for $1.25 billion each in cash.
Shell's chief executive, Ben van Beurden, said: "We are
strengthening Shell's world-class investment case by focusing on
free cash flow and higher returns on capital, and prioritizing
businesses where we have global scale and a competitive advantage
such as integrated gas and deep water.
"The proceeds will accelerate free cash flow and reduce gearing
and make a meaningful contribution to Shell's $30 billion
divestment program," he added.
Marathon Oil also said Thursday that it would buy about 70,000
net surface acres in the U.S.'s Permian Basin from BC Operating
Inc. and other entities for $1.1 billion in cash.
Marathon Oil said the Canadian oil sands deal is expected to
close in mid-2017, while the Permian Basin deal will close in the
second quarter of 2017.
Write to Ian Walker at ian.walker@wsj.com
(END) Dow Jones Newswires
March 09, 2017 03:02 ET (08:02 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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