Jan 22, 2017
Shell sells $820m stake in Saudi petrochemicals business
Royal Dutch Shell has agreed to sell its 50 per cent stake in a Saudi Arabian petrochemicals joint venture for $820m, the latest in a series of disposals aimed at reducing debts and streamlining the Anglo-Dutch group's sprawling portfolio of assets. The deal will give full control of the business, known as Sadaf, to Shell's partner, Saudi Basic Industries, the Saudi state-controlled chemicals group known as Sabic. A $1.4bn deal to withdraw from its Showa Shell refining partnership in Japan was completed last month and negotiations are continuing on the planned break-up of its Motiva refining joint-venture with Saudi Aramco in the US. Signs of progress on disposals coupled with the recent upturn in oil prices has eased investor concern over the state of Shell's balance sheet and the sustainability of its dividend - the largest in the oil industry. Shell remains under pressure to shed more assets after the tripling of net debts since the BG deal to $78bn at the end of the third quarter. RBC analysts expect a further $2.7bn of cash proceeds to be booked in the fourth quarter from subsequent sales, including Canadian shale assets and the Showa Shell stake.
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