By WILL KENNEDY and EDUARD GISMATULLIN
Royal Dutch Shell, Europe
s largest oil company,
will exit the Wheatstone LNG project in Australia after
selling its interests for $1.14 billion to state-run Kuwait
Foreign Exploration Petroleum Co.
Shell, which had been involved in seven liquefied natural gas
projects in the country, will concentrate investment away
from the Chevron Corp.-led venture in Western Australia, it
said. It will sell its 8% stake in the Wheatstone-Iago fields
and 6.4% in the LNG plant to Kufpec, as the state-run Kuwait
company is known.
Shell will remain a major player in Australias
energy industry, Shell CEO Ben van Beurden said in the
statement. However, we are refocusing our investment to
where we can add the most value with Shells capital and
The Anglo-Dutch company, which planned to invest about $50
billion in Australian LNG, has been reviewing project
s worldwide after capital
expenditure rose to record $44 billion last year. Van
Beurden, who took charge at the start of the year, may step
up assets sales after Shell said Jan. 17 that fourth-quarter
earnings will fall to the lowest since 2009.
The Hague-based company also said that its examining
possible job cuts at its Australian Arrow Energy Ltd. unit.
Shell together with its partner PetroChina Co., Chinas
biggest listed oil and gas producer, delayed an investment
decision into the LNG project
after costs in Australia
The sale to Kufpec, which already had stake in Wheatstone LNG
and nearby fields, will not impact the projects
existing commercial agreements, Shell said.
This transaction is consistent with Kufpecs
strategy of investing in projects that have strategic tie-ins
with the Kuwaiti oil sector, the Kuwait company CEO
Sheikh Nawaf Saud Al-Sabah said.
Wheatstone LNG, which will ship 8.9 million tpy of LNG, is
due to start production in 2016. The partners, which also
include Apache Corp. and Kyushu Electric Power Co., started
of the plant in 2012.
will supply the fuel to
customers in Asia, such as Japans Tokyo Electric Power
Co., Chubu Electric Power Co. and Tohoku Electric Power Co.