Shell to offload Woodside stake
Shell has reclassified its 13.6 per cent stake in Woodside as an asset for sale.
Shell has reclassified its remaining 13.6 per cent stake in Woodside Petroleum in its accounts as an “asset for sale,” sparking speculation it will soon make a long-awaited $3 billion move to exit Australia’s biggest standalone oil and gas company.
The move was revealed in Shell’s second-quarter earnings report, released in London overnight, setting dealing desks abuzz with speculation that a sell-out is on the way.
“It (the Woodside stake) is now held as an asset for sale,” Shell chief financial officer Simon Henry told analysts overnight.
“It has long been an asset there with not a long-term strategic intent to hold.”
Mr Henry said the reclassification was driven by Shell no longer having the right to appoint two directors, after a 2014 selldown from a 19 per cent stake left it with the right to appoint just one.
“Therefore the influence has fallen below that at which we can recognise the investment as an equity associate.”
Woodside shareholders voted down a $US2.7 billion buyback of Shell shares in August 2014 that would have reduced the oil major’s stake to less than 5 per cent.
The buyback was at $36.49 per share.
Shell has since said the subsequent fall in the Woodside share price as oil prices fell made it less keen to sell its remaining stake in the near term. It is unclear whether the accounting move signifies Shell’s appetite for a sale has increased as the oil price downturn has become prolonged.
At 1.43pm, Woodside shares were 59c, or 2.2 per cent, lower at $26.52.
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