Royal Dutch Shell in advanced talks to sell assets in Gabon
26 November 2016
Royal Dutch Shell is in advanced talks with an unnamed suitor over the sale of its onshore operations in Gabon, as part of the European energy giant's plan of selling assets worth $30 billion.
A sale of the Gabon fields could fetch Shell around $700 million.
Shell did not reveal the identity of the potential buyer, but banking sources told Reuters that US private equity firm Carlyle Group, and Perenco, an independent European oil and gas company, are in the second round of bidding for the assets.
In March, Shell decided to sell assets worth $30 billion in a bid to bolster its balance sheet, which ratings agency Fitch downgraded a month after the Anglo-Dutch oil giant completed its $49-billion acquisition of BG Group. (See: Shell plans to sell assets worth $30 bn)
The sale plan comes after the London and Hague-based company sold assets worth $20 billion between 2014-1015.
But Shell has hit hurdles in the sale process since oil prices have crashed and is currently hovering at around $47 a barrel. When Shell sold assets worth $20 billion in 2014-15, oil prices were at around $100 a barrel.
So far this year, Shell has sold or agreed to sell around $6 billion of assets.
Plummeting crude prices have hit oil companies across the world and slashed earnings of other oil majors, including Exxon Mobil Corp and BP Plc, retarding investments in new oil exploration while at the same time hitting investor returns.
The London-listed company, like other rivals, has scaled down on spending on new projects. It recently announced that it would reduce its planned capital spending over the next three years by $15 billion.
Shell has been operating in Gabon for 56 years and is one of the biggest investors in the country's oil-and-gas sector.