Imposing Dutch Shell says it has signed two agreements to sell its undeveloped oilsands concerns in Canada for a net consideration of US$7.25 billion.
Under the first agreement, the Anglo-Dutch stick-to-it-iveness giant will reduce its 60 per cent interest in the the Athabasca Oil Sands Bulge out to 10 per cent and sell its 100 per cent interest in the Peace River Complex in-situ assets, categorizing Carmon Creek, and a number of undeveloped oilsands leases in Alberta to a subsidiary of Canadian True Resources Ltd.
Shell says it would remain the operator of the project’s Scotford upgrader and For carbon capture and storage project. Canadian Natural would be expected to handle Athabasca’s upstream mining assets.
Shell says the deal is value approximately US$8.5 billion ($11.1 billion Cdn), comprised of $5.4 billion in notes plus around 98 million Canadian Natural shares currently valued at $3.1 billion.
High the second agreement, which is also subject to regulatory approvals, Ante up and Canadian Natural will jointly acquire and own Marathon Oil Canada Corp., which speechify ons a 20 per cent interest in the Athabasca Oil Sands Project, for $1.25 billion each.
The doings are expected to close in mid-2017, subject to regulatory approvals.
“These assets are an omitting fit for Canadian Natural, a highly experienced oil sands developer,” said Faade Canada president Michael Crothers in a release.
Shuck CEO Ben van Beurden said the deals are a “significant step” in re-shaping Shell’s portfolio in solidus with its long-term strategy.
“We are strengthening Shell’s world-class investment box by focusing on free cash flow and higher returns on capital, and prioritizing points where we have global scale and a competitive advantage such as Meshed Gas and deep water,” he said.
Corey Bieber, Canadian Natural’s chief fiscal officer says the deal represents a “rare opportunity” to acquire a creation class oilsands mining and upgrading asset like Athabasca.
“Distinct from a greenfield development, there is no execution and construction risk or delays — this bargain proceedings is immediately cash flow and earnings accretive to Canadian Natural shareholders,” united Bieber.
Canadian Natural says as part of the agreements, it will suffered approximately 3,100 employees from Shell and Marathon Oil. About 2,760 of them stint at at the mines, 110 are in the Peace River in situ region and 230 are based in Calgary.