WOODSIDE PETROLEUM ON THE DEFENSIVE

Woodside in defence mode

as Shell sells down

Barry FitzGerald
November 8, 2010 – 2:18PM

Australia’s biggest independent oil and gas company Woodside Petroleum is in takeover defence mode after long-time shareholder and technical adviser Shell offloaded a 10 per cent stake for $3.3 billion.

The sale will leave Shell with a 24.27 per cent Woodside stake but has signalled that Shell is an eventual seller of the rest of its stake, with BHP Billiton a candidate following its inability to secure Canadian government approval last week for its $40 billion hostile takeover bid for crop nutrient producer Potash Corp.

Shell’s divestment to a spread of investors through UBS AG is at $42.23 a share.

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That is at a discount to Woodside’s closing market price today of $45.86 a share – a higher level reached in recent days in response to speculation that BHP would now turn its attention to the operator of the North West Shelf gas project following the Potash disappointment.

Shell has told buyers of the offloaded stake that it will stick around with the rest of its holding for at least one year.

Shell chief executive Peter Voser said Shell’s selldown was part of the Anglo-Dutch giant’s drive to focus on direct investments, rather than indirect stakes. ‘‘We will manage our remaining position in Woodside over time in the context of our global portfolio.”

The selldown by Shell means that the world’s oil and gas majors – minus Shell – will be running the rule over the country’s premier liquefied natural gas producer.

The move by Shell comes as future management of Woodside is left in limbo following the recent decision by long-serving chief executive Don Voelte to return to America.

Sourced & published by Henry Sapiecha

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