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Shell divests Oil Sands for net $7.25bn

09 March 2017 07:20

Royal Dutch Shell has agreed to sell all of its in-situ and undeveloped oil sands interests in Canada and reduce its share in the Athabasca Oil Sands Project (AOSP) from 60% to 10%.

The combination of these transactions -- the result of agreements signed by Shell Canada Energy, Shell Canada Ltd and Shell Canada Resources -- would result in a net consideration of $7.25bn to Shell.

Shell would remain as operator of AOSP's Scotford upgrader and Quest carbon capture and storage (CCS) project.

Under the first agreement, Shell will sell to a subsidiary of Canadian Natural Resources Ltd its entire 60% interest in AOSP, its 100% interest in the Peace River Complex in-situ assets, including Carmon Creek, and a number of undeveloped oil sands leases in Alberta, Canada.

The consideration to Shell from Canadian Natural was about $8.5bn, comprised of $5.4bn cash plus around 98m Canadian Natural shares currently valued at $3.1bn.

Canadian Natural is one of Canada's largest energy companies and a leader in the oil sands, with a market capitalisation of about $35bn.

Separately and under the second agreement, Shell and Canadian Natural would jointly acquire and own equally Marathon Oil Canada Corporation, which holds a 20% interest in AOSP, from an affiliate of Marathon Oil Corporation for $1.25bn each, to be settled in cash.

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