Shell to net $7.25bn in oil sands divestment

Shell is to net $7.25 billion (£6bn) in a move towards oil sands divestment. The oil and gas giant also announced it would reduce its share in the Athabasca Oil Sands Project (AOSP) […]

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By Jonny Bairstow

Shell is to net $7.25 billion (£6bn) in a move towards oil sands divestment.

The oil and gas giant also announced it would reduce its share in the Athabasca Oil Sands Project (AOSP) from 60% to 10% as it outlined the next stage of its divestment plan.

The company will sell its entire 60% interest in AOSP, its 100% interest in the Peace River Complex and a number of undeveloped oil sands leases in Alberta to a subsidiary of Canadian Natural Resources Limited (CNRL) for approximately $8.5 billion (£7bn).

In a separate agreement, Shell and CNRL will jointly acquire the Marathon Oil Canada Corporation for $1.25 billion (£1.03bn) each and split its 20% interest in AOSP down the middle.

The combination of these transactions will result in a net consideration of $7.25 billion (£6bn) to Shell.

Shell’s Chief Executive Officer Ben van Beurden said: “This announcement is a significant step in reshaping Shell’s portfolio in line with our long term strategy.

“The proceeds will accelerate free cash flow and reduce gearing and make a meaningful contribution to Shell’s $30 billion (£24.7bn) divestment programme.”

Shell has also recently agreed to sell a package of its assets in the UK North Sea for up to $3.8 billion (£3bn).

Leonardo DiCaprio flies over Canadian oil sands projects in his new environmental film, ‘Before the Flood’.