Shell selling Alta. oilsands interests to Canadian Natural
The deal, which consists of two separate agreements, will see Shell shed its Peace River operation and reduce its interest in Athabasca oilsands assets to 10 per cent from 60 per cent
TORONTO—Royal Dutch Shell says it has signed two agreements to sell its undeveloped oilsands interests in Canada for a net consideration of US$7.25 billion.
Under the first agreement, the Anglo-Dutch energy giant will reduce its 60 per cent interest in the the Athabasca Oil Sands Project to 10 per cent and sell its 100 per cent interest in the Peace River Complex in-situ assets, including Carmon Creek, and a number of undeveloped oilsands leases in Alberta to a subsidiary of Canadian Natural Resources Ltd.
Shell says it would remain the operator of the project’s Scotford upgrader and Quest carbon capture and storage project. Canadian Natural would be expected to operate Athabasca’s upstream mining assets.
Shell says the deal is worth approximately US$8.5 billion (CAN$11.1 billion), comprised of $5.4 billion in cash plus around 98 million Canadian Natural shares currently valued at $3.1 billion.
Under the second agreement, which is also subject to regulatory approvals, Shell and Canadian Natural will jointly acquire and own Marathon Oil Canada Corp., which holds a 20 per cent interest in the Athabasca Oil Sands Project, for $1.25 billion each.
The transactions are expected to close in mid-2017, subject to regulatory approvals.
“These assets are an excellent fit for Canadian Natural, a highly experienced oil sands developer,” said Shell Canada president Michael Crothers in a release.
Shell CEO Ben van Beurden said the deals are a “significant step” in reshaping Shell’s portfolio in line with its long-term strategy.
“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,” he said.