LONDON, Dec 25 (Reuters) - Royal Dutch Shell's 23.1percent stake in Australian oil and gas group Woodside Petroleum is seen as more likely to be split up and/or sold toinstitutional shareholders than to go in one piece to astrategic buyer, bankers said.
The holding, worth about $6.4 billion and left over fromShell's abortive attempt to acquire Woodside in 2001, has longbeen viewed as non-core to Shell.
This year, the Anglo-Dutch company promised to accelerateasset sales to reflate a narrowing cushion between cash inflowand investment spending.
Reuters was unable to verify Shell's intentions for thestake. Shell and Woodside declined to comment on its future.
Bankers say the holding is an obvious selloff candidate forincoming Chief Executive Ben van Beurden, who takes the job onJan. 1 and will offer strategy pointers on Jan. 30 along withfourth-quarter results.
However, they say, other investor-owned international oilcompanies big enough to buy it are also in selloff mode.
Meanwhile, a strategic buyer such as one of China's top oilcompanies or the national oil companies (NOCs) of gas-hungrycountries such as India or Thailand might be put off by Shell'sexperience with the Australian government when it tried to takefull control of Woodside in 2001.
"Bidder-wise, it's a tricky one," one banker said.
"The deal is big enough to require a review by thegovernment, and although Woodside is not as important as it wasat the time when Shell's bid was blocked, it is still thelargest independent oil company in Australia, so I don't thinkthe Chinese NOCs would be welcome."
The banker suggested Middle Eastern or Southeast Asiansovereign wealth funds might be interested, but said Shellprobably would not find a buyer among them for the entire stakeand would have to sell in small blocks.
The banker predicted Shell would exit via a combination ofstrategic sales, market placements and probably a share buybackby Woodside.
A second banker said the stake as a single block had been"shopped" to a number of potential strategic buyers withoutresult, and predicted the shares would be spread in the marketamong institutional investors.
LONG HISTORY
Shell's interest in the plentiful offshore gas underAustralia's northwest shelf dates back decades and remainsstrong through its Prelude floating liquefied natural gas (FLNG)project, which will draw gas from below the seabed and processit on board the world's largest vessel.
The company built a 34 percent holding in Woodside as partof that interest. Shell also became, and remains, a partner inthe Woodside-operated Browse LNG project, which is set to usePrelude FLNG technology.
In 2001, Shell's attempt to increase its Woodside holding toa majority was blocked by the Australian government on thegrounds that the move might slow gas development in Australia.
The country is set to become the world's biggest LNGexporter later in the decade, overtaking Qatar, as a number ofmajor LNG projects come to fruition.
Shell sold a third of its Woodside holding in 2010, reducingthat 34 percent stake to the 23.1 percent it holds now.