Shell sells Canadian Natural, moves closer to $30 bn divestment goal

International oil major Royal Dutch Shell in its recent announcement has unveiled that it will be selling off its stake in the oilsands producer Canadian Natural Resources Ltd. for USD 3.3 billion. Reportedly, the sale is expected to serve two of Shell’s purposes at the same time – shedding its assets and significantly reducing the debt build up after the purchase of the BC Group Plc., for USD 50 billion.Sources familiar with the matter reveal that the sale of Canadian Natural Resources was originally announced last year, when crude oil prices were nearly USD 20 a barrel lower. At that time, Shell claimed to sell all of its production assets in Canada’s oilsands for a USD 7.25 billion deal, while Canadian Natural settled to offer CAD 4 billion of its shares to Shell, as the part of the accord.

According to reports, the oil major has divested nearly USD 26 billion of its target of raising USD 30 billion from asset-sales by the end of 2019. Sources further cite that by completing its Canada Natural transaction and several other deals, Shell has almost reached its target.

Shell’s spokesperson was quoted stating that the recent announcement is a strategic move that has contributed to the company’s plan to reshape models and reinforce its financial framework.

Ben van Beurden, CEO, Shell, affirmed in a statement that the deal also has long-term benefits beyond its short-term debt reduction goal. He added that the company is also keen to demonstrate its actions on cutting down emissions, as Shell repositions to focus on clean natural gas sources and shedding carbon-intensive assets like the oil sands.

It has been reported that Shell still has around 10% share in the Athabasca Oil Sands Project and retains a significant presence in Canada. The oil major has also entered into an agreement with RBC Capital Markets, Goldman Sachs & Co., TD Securities, and Scotiabank.