The second-largest oil and gas producer in Australia – Woodside Petroleum Ltd – pressed Royal Dutch Shell Plc to take action on its stake in the company, which is estimated to 7.3 billion Australian dollars (6.6 billion dollars). Woodside Petroleum quoted the investors desire for some “certainty” as the main reason for this request.
Peter Coleman, who is the Chief Executive Officer of Woodside Petroleum Ltd, said in an interview, which was cited by Bloomberg: “Everyone would like some clarity on that because it has been out there in the market for about three years. The market is looking for some certainty now.” Mr. Coleman also revealed that Woodside has not yet talked with Royal Dutch Shell about its plans for its stake in the company.
In 2013 the largest oil company in Europe – Royal Dutch Shell Plc revealed that it may sell its 23% stake. This announcement raised theories that such a decision may provoke approaches from potential buyers. Currently, the company is the largest shareholder of Woodside Petroleum.
One of the strategists working at IG Markets Ltd – Evan Lucas, said in a telephone interview for Bloomberg that investors would view a Shell sale as positive. He added: “The bulls see this as a blue-sky event for Woodside because it releases them from a known overhang.”
Royal Dutch Shell has been focused on winning the confidence of its investors after it posted a fourth-quarter profit, which decreased to the lowest since 2009. The company may spur its asset sales in order to free cash for some new projects. Such a move, however, is considered as a possibility for Shell to finally dispose of its remaining stake in Woodside Petroleum Ltd.
The Chief Executive Officer of Woodside Mr. Coleman explained that in the past, the two companies have had some talks about the options Shell may choose from. As reported by Bloomberg, he said: “But at the end of the day, it’s their decision. We’ve said, look, if you want we’re here to help.”
In 2013, Royal Dutch Shell revealed that its stake in Woodside does not correspond with the long-term plans of the company. That is the reason why Vincent Pisani, who is one of the analysts working for Shaw Stockbroking Ltd, said in December 2013 that it is more likely to offer the shares in question to institutional investors.
Woodside Petroleum Ltds shares rose by 0.60% in Sydney to settle the session at AUD 38.60, the highest in a month, marking a market capitalization of 31.8 billion Australian dollars.
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