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RPT-Shell's U.S deal to unlock global oil asset disposals

Wed, 31st Aug 2016 06:00

(Repeats Aug 30 story with no changes)

* Shell lines up large North Sea asset sale

* In talks to sell out of Gabon, NZealand, Thailand, Tunisia

* Gulf of Mexico deal sets deal value at $60/bbl

* Shell seeks to sell $6-$8 bln of assets in 2016

By Ron Bousso

LONDON, Aug 30 (Reuters) - Royal Dutch Shell's first oil field sale after its $54 billion BG Group acquisitionbodes well for its disposal talks in the North Sea, Gabon andNew Zealand, according to sources, signalling buyers will meetits expectations on value.

The $425 million deal in the Gulf of Mexico is welcome newsfor the Anglo-Dutch oil and gas giant which has struggled tokick off its plan to dispose of $30 billion of assets by 2018 orso in order to pay for the February deal and maintain a generousdividend policy amid soaring debt.

The sale of the Brutus/Glider fields to U.S. independent oiland gas company EnVen Energy Corp has an implied oil price ofaround $60 a barrel, more than $10 above today's prices,according to analysts at UBS.

"With oil prices appearing to have bottomed at the start of2016 and a pathway towards higher levels into 2017/18 we may nowbe entering a period where both buyer and seller can seeacceptable relative value - unlocking the A&D (acquisition anddivestiture) market," the UBS analysts added.

Shell's Chief Financial Officer Simon Henry told Reutersearlier this year Shell would not sell oil and gas fields at $48a barrel in order to meet its target.

Further deals might prove harder to clinch however, asactivity in the U.S. market picked up faster than other areasafter more than two years of oil price declines and volatilityled to a sharp slowdown in activity, industry sources said.

Shell is currently in advanced talks to sell a largeportfolio of fields in the UK North Sea, an ageing basin withhigh production costs and strict regulatory requirements.

The company, which plans to exit operations in 5 to 10countries, is also in talks to sell its portfolio in Gabon, NewZealand, Thailand and Tunisia, according to several sources.

The North Sea portfolio is a mix of mature fields and moreattractive new developments such as BG's non-operating stake inBuzzard north of Aberdeen, a relatively new field that feedsinto the global Brent oil benchmark.

Shell is also selling a share in its 55 percent holding inthe BP-operated Schiehallion oilfield development some110 miles (180 km) west of the Shetland Islands.

Other assets include the Nelson, Armada, Everest, Lomond andJ Block fields, and Shell's stake in the Statoil-led Bressay development, sources close to the company said.

Potential buyers include Neptune, a venture headed byindustry veteran Sam Laidlaw and backed by private equity fundsCarlyle Group and CVC Partners, as well as Siccar PointEnergy, backed by Blue Water Energy and Blackstone.

A Shell spokesman declined to comment.

The Anglo-Dutch company, like its peers, has struggled todispose of upstream assets, focusing instead on refining andstorage assets which are less exposed to oil price volatility.

So far this year, Shell has sold $2 billion of assets,leaving relatively little time to hit its $6-$8 billion target.

"I think the $6 billion target is highly realistic," saidOswald Clint, senior analyst at Bernstein, which has an'outperform' rating on Shell.

"If you track the last 5 years of divestments by oil majors,all of them met them. Shell have a $30 billion target and Ibelieve they can do it." (Reporting by Ron Bousso; Editing by Alexandra Hudson)

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