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Woodside CEO seeks Shell exit decision on $6.6 billion stake

BY JAMES PATON

SYDNEY (Bloomberg) -- Woodside Petroleum is pressing Royal Dutch Shell to take action on its $6.6 billion stake in the company, saying investors want “certainty.”

“Everyone would like some clarity on that because it has been out there in the market for about three years,” CEO Peter Coleman said in an interview. “The market is looking for some certainty now.”

Shell flagged last year that it would “eventually” sell the 23% holding, raising speculation this may trigger approaches from potential buyers. Woodside has talked to Shell in the past about its options, Coleman said. “But at the end of the day, it’s their decision. We’ve said, look, if you want we’re here to help.”

Shell said last year that the Woodside holding doesn’t fit into its long-term plans. Shell is more likely to sell the shares to institutional investors, Vincent Pisani, an analyst at Shaw Stockbroking Ltd. in Melbourne, said in December.

The Australian oil producer is pushing ahead with overseas expansion in countries such as Myanmar after delays at its proposed Browse and Sunrise liquefied natural gas ventures at home. Woodside signed an initial agreement earlier this month to acquire a quarter of Israel’s biggest natural gas field, Leviathan, for as much as $2.6 billion and is considering a potential LNG development on the west coast of Canada.

Woodside faces growing pressure to make an acquisition of as much as $5 billion and may consider buying InterOil Corp. or a stake in Papua New Guinea gas fields from Total SA, Macquarie Group Ltd. analysts said in a report last month. That’s because Woodside appears to have few opportunities to grow with its existing assets, according to the report.

While Woodside would consider investments in Papua New Guinea, the company sees potential assets in the Pacific nation as “fully priced,” Coleman said. “What we need to be doing is looking for things that have a very clear line of sight to monetization, and the earlier that monetization is, the better for us,” he said.

02/20/2014

 

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