Shell to dump $3.5 billion stake in Woodside

The North West Shelf Project, where Shell and Woodside are partners. Image: Woodside Petroleum

Oil and gas giant Shell is parting ways with Woodside Petroleum after a long relationship as a key shareholder of the Australian company.

Shell has secured a deal to sell its stake in Woodside to institutional investors for $US2.7 billion ($3.5 billion).

The deal, which involves 111.8 million shares at $31.10 per share, represents Shell’s entire shareholding in Woodside and 13.3 per cent of the Perth-based company’s total share base. Woodside’s shares closed trading at $32.24 on Monday.

Shell was originally planning to offload a $2.2 billion stake in Woodside to a pair of investment banks. However, it swiftly upsized the deal, due to strong investor demand, to also include the remaining shares it owns in Woodside.

“This sale is another step towards the completion of our three-year $30 billion divestment programme, which is an important part of our strategy to reshape Shell, to deliver a world class investment case, and to strengthen our financial framework,” Shell chief financial officer Jessica Uhl said.

“Proceeds from the sale will contribute to reducing our net debt.”

Despite the share sale, Shell will remain a joint venture partner with Woodside at two liquefied natural gas projects in Australia.

The two companies have an extensive history, including Shell’s blocked $10 billion takeover attempt for Woodside in 2001.