Shell pushes ahead with asset selloff
TOKYO, July 30, 2015 – Shell is selling its one-third stake in Japanese refining company Showa Shell Sekiyu in a deal worth around $1.4 billion, the company said in a statement on Thursday. Idemitsu Kosan, Japan’s second-largest refiner, will purchase Shell’s stake in the fifth-largest refiner in a bid to compete with market leader JX Holdings. Under the agreement, expected to be finalised in 2016, Shell will retain a 1.8-percent share.
The selloff comes as Shell continues an aggressive asset sales drive, which could see the company release as much as $20 billion in assets between 2014 and 2015. The super-major is pushing to trim operations and free up cash amid declining oil and gas revenues, and ahead of its proposed $70-billion takeover of UK rival BG Group. Shell also recently announced a 6,500-staff layoff.
In its earnings report for the second quarter of 2015, Shell again lowered capital expenditure expectations for the year to $30 billion. This is $3 billion lower than forecasted at the end of the first quarter, and marks a 20-percent decline from 2014 and 35-percent decline from 2013. Shell’s revenues for the second quarter stood at $3.36 billion, a 35-percent year-on-year drop from $5.15 billion in 2014.
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