Shares in Australia's largest oil and gas company Woodside Petroleum Limited (ASX: WPL) are down over 3% this morning to $31.20 following global oil giant Royal Dutch Shell divesting its remaining $3.5 billion holding in the company.
That represented 13.28 percent of Woodside shares and the entirety of SEHAL's shareholding in the company, it said. The sale, which is expected to complete on Tuesday, will result in total pre-tax proceeds of around $1.7bn (A$2.2bn).
The North West Shelf Project, where Shell and Woodside are partners. The announcements came after the close of trade on the Australian bourse, where Woodside ended 1 percent lower at A$32.24 a share.
Analysts at investment bank Tudor, Pickering, Holt & Co said that Shell's $30 billion target "is easily within reach and we see the potential for this to be increased at the Management Day" on November 28. However, it swiftly upsized the deal, due to strong investor demand, to also include the remaining shares it owns in Woodside.
The divestment program is an important part of Shell's strategy to reshape itself, as well as deliver a world class investment case and strengthen its financial network.
Shell said today that proceeds from its sale of Woodside shares will be used to reduce the group's net debt.
The two companies have an extensive history, including Shell's blocked $10 billion takeover attempt for Woodside in 2001.
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